Planning for 2021 Now as the IRS Has Released Inflation Adjustments for 2021

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.