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.