As we look forward for the coming 2021 tax season, we can start planning for 2021 with these adjustments from the IRS:
- 2021 Standard deductions:
- Single and Married Filing Separately $12,550
- Head of Household $18,800
- Married Filing Jointly $25,100
- Maximum capital gains rates of zero:
- Single and Married Filing Separately $40,400
- Head of Household $54,100
- Married Filing Jointly $80,800
- Kiddie tax threshold is unchanged and remains at $1,100
- Adoption Credit Expenses $14,440
- Section 179 begins phaseout at $1,050,000 and fully phases out at $2,630,000
- Retirement Plan Amount for 2021 (All are unchanged from 2020)
- 401k contributions – $19,500, 50+ catchup at $6,500
- Simple-IRA contributions – $13,500, 50+ catchup at $3,000
- Individual IRA’s and Roth IRA’s – $6,000, 50+ catchup at $1,000
There are other adjustments for 2021, I would be happy to discuss during the 2021 planning and discovery process. With these number now, we can set goals and make plans for success in 2021 and beyond.
