Tax Updates.
Tax
Rates
Individual
Unmarried Individuals (other than surviving spouses and heads of households)
Taxable Income
2021 Tax
Not over $9,950
10% of taxable income
Over $9,950 but not over
$40,525
$995 plus 12% of the amount over $9,950
Over $40,525 but not over
$86,375
$4,664 plus 22% of the amount over $40,525
Over $86,375 but not over
$164,925
$14,751 plus 24% of the amount over $86,375
Over $164,925 but not over
$209,425
$33,603 plus 32% of the amount over $164,925
Over $209,425 not over
$523,600
$47,843 plus 35% of the amount over $209,425
Over $523,600
$157,804.25 plus 37% of the amount over $523,600
Married Individuals Filing Joint Returns, & Surviving Spouses
Taxable Income
2021 Tax
Not over $19,900
10% of taxable income
Over $19,900 but not over
$81,050
$1,990 plus 12% of the amount over $19,900
Over $81,050 but not over
$172,750
$9,328 plus 22% of the amount over $81,050
Over $172,750 but not over
$329,850
$29,502 plus 24% of the amount over $172,750
Over $329,850 but not over
$418,850
$67,206 plus 32% of the amount over $329,850
Over $418,850 but not over
$628,300
$95,686 plus 35% of the amount over $418,850
Over $628,300
$168,993.50 plus 37% of the amount over $628,300
Married Individuals Filing Separate Returns
Taxable Income
2021 Tax
Not over $9,950
10% of taxable income
Over $9,950 but not over
$40,525
$995 plus 12% of the amount over $9,950
Over $40,525 but not over
$86,375
$4,664 plus 22% of the amount over $40,525
Over $86,375 but not over
$164,925
$14,751 plus 24% of the amount over $86,375
Over $164,925 but not over
$209,425
$33,603 plus 32% of the amount over $164,925
Over $209,425 not over
$314,150
$47,843 plus 35% of the amount over $209,425
Over $314,150
$84,496.75 plus 37% of the amount over $314,150
Heads of Households
Taxable Income
2021 Tax
Not over $14,200
10% of taxable income
Over $14,200 but not over
$54,200
$1,420 plus 12% of the amount over $14,200
Over $54,200 but not over
$86,350
$6,220 plus 22% of the amount over $54,200
Over $86,350 but not over
$164,900
$13,293 plus 24% of the amount over $86,350
Over $164,900 but not over
$209,400
$32,145 plus 32% of the amount over $164,900
Over $209,400 not over
$523,600
$46,385 plus 35% of the amount over $209,400
Over $523,600
$156,355 plus 37% of the amount over $523,600
2021 C Corporation Tax Rates
Taxable Income
2021 Tax
Any Amount of Income
21%
2021 Estates & Trusts Tax Rates
Taxable Income
2021 Tax
Not over $2,650
10% of taxable income
Over $2,650 but not over
$9,550
$265 plus 24% of the excess over $2,650
Over $9,550 but not over
$13,050
$1,921 plus 35% of excess over $9,550
Over $13,050
$3,146 plus 37% of the excess over $13,050
Social Security & Medicare
Self-Employed
Employee
SS Tax Rate
12.4%
6.2%
Max Wages Subject to SS
$154,629*
$142,800
Med. Tax Rate
2.9%
1.45%
Additional Medicare Tax of 0.9%
Married Filing Joint – MAGI > $250,000
Married Filing Separate – > $125,000
Others – > $200,00
*The reason for the higher number is that only 92.35% of your net profits are taxed at 12.4%, and the $142,800 threshold is after application of the 92.35%.
2021 Capital
Gain Rates
Capital Asset
Holding Period
Tax Rate
Short-term capital gains.
One year or less.
Ordinary income tax rates, up to 37%.
Long-term capital gains.
More than one year.
Taxpayers with income below the 15% rate threshold below, pay 0%.
The following are the income thresholds for 15% and 20% rates.
Married Filing Jointly:
15% Rate – $80,801 – $501,600
20% Rate – over
$501,600
Married Filing Separately:
15% Rate – $40,401 – $250,800
20% Rate – over
$250,800
Head of Household:
15% Rate – $54,101 – $473,750
20% Rate – over
$473,750
Unmarried Individuals:
15% Rate – $40,401 – $445,850
20% Rate – over
$445,850
Collectibles.
More than one year.
28%
Section 1202 qualified small business stock.
More than
five years.
28%
Unrecaptured §1250 Gain, (gains on real property attributable to straight-line depreciation).
More than one year.
25%
Personal
Deduction
2021 Standard Deduction
Filing Status
Standard Deduction
Unmarried Individuals
$12,550
Married Individuals Filing Separate Returns
$12,550
Heads of Households
$18,800
Married Individuals Filing Joint Returns & Surviving Spouses
$25,100
Dependents
$12,550
Vehicles
2021 Standard Mileage Rates
IRS Mileage Rate (in cents per mile)
Business
56.0
Charitable
14.0
Medical & Moving
16.0
Depreciation
26.0
2021 Personal Exemptions
Per Individual
No Longer Applicable
DEPRECIATION LIMITS FOR PASSENGER VEHICLES PLACED IN SERVICE IN 2020
*Note that the 2021 limits will be released later in 2021
With Bonus Depreciation
No Bonus Depreciation
Tax Year
Amount
Amount
1st Tax Year
$18,100
$10,100
2nd Tax Year
$16,100
$16,100
3rd Tax Year
$9,700
$9,700
Each Succeeding Year
$5,760
$5,760
Retirement
Plans 2021
IRA contribution (under age 50)
$6,000
IRA contribution (50 and older)
IRA contribution (under age 50)
$7,000
IRA deductibility phase-out (based on MAGI)
Participants in employer plans
Single or Head of Household
$66,000 – $76,000
Married, filing jointly
$105,000 – $125,000
Married, filing separately
$0 – $10,000
Nonparticipants in employer plans
Nonparticipant married to a participant
$198,000 – $208,000
Neither spouse a participant
Fully deductible
Phase out of Roth IRA contribution eligibility
Single
$125,000 – $140,000
Married, filing jointly
$198,000 – $208,000
Retirement Plan
Max Employee Contribution
Max Employer Contribution
SEP
N/A
25% of wages or 20% of net self- employment income,
max of $58,000
SIMPLE IRA
$13,500*
N/A
401(k)
$19,500**
25% of wages***
*$16,500 if 50 or older
**$26,000 if 50 or older
***Combined maximum of employee and employer contributions is $58,000 in 20212,800 threshold is after application of the 92.35%.
