Our 2021 Handy Tax Guide is an easy-to-use reference that contains up-to-date facts to help guide you through this year.

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  • Individual Income Tax Rates
    Married Taxpayers Filing Jointly or Surviving Spouses
    Taxable Income OverBut Not OverIs Taxed At
    $0$19,90010%
    $19,900$81,05012%
    $81,050$172,75022%
    $172,750$329,85024%
    $329,850$418,85032%
    $418,850$628,30035%
    $628,30037%
    Single Taxpayers
    Taxable Income OverBut Not OverIs Taxed At
    $0$9,95010%
    $9,950$40,52512%
    $40,525$86,37522%
    $86,375$164,92524%
    $164,925$209,42532%
    $209,425$523,60035%
    $523,60037%
    Heads of Household
    Taxable Income OverBut Not OverIs Taxed At
    $0$14,20010%
    $14,200$54,20012%
    $54,200$86,35022%
    $86,350$164,90024%
    $164,900$209,40032%
    $209,400$523,60035%
    $523,60037%
    Estates & Trusts
    Taxable Income OverBut Not OverIs Taxed At
    $0$2,65010%
    $2,650$9,55024%
    $9,550$13,05035%
    $13,05037%
    Alternative Minimum Tax
    Tax Rate on AMTI26% up to$199,900
    28% over$199,900
    Exemption AmountPhase-Out Threshold
    Married Filing Jointly$114,600$1,047,200
    Married Filing Separately$57,300$523,600
    All Individual Tax Payers$73,600$523,600
  • Deductions & Exemptions
    Standard Deduction*Elderly or Blind**
    Married Filing Jointly$25,100$1,350
    Single$12,550$1,700
    Head of Household$18,800$1,700
    Married Filing Separately$12,550$1,350
    Dependent of Another$1,100

    *You are allowed to deduct the greater of your standard deduction or your itemized deductions.

    Personal Exemptions - Repealed Deduction Limitations

    Section 199A Qualified Business Income Deduction: 20% of domestic qualified business income (multiple limitations apply).

    Medical & Dental Expenses: Excess over 7.5% AGI.

    State & Local Taxes: $10,000 maximum deduction.

    Mortgage Interest Deduction: Limited to $750,000 of principal for post 12/15/17 acquisition indebtedness.

    Deductions Repealed (as of Jan 1, 2018)
    • Miscellaneous itemized deductions
    • Interest on home equity indebtedness
    • Moving expenses
    Credits

    Tax credits of $2,000 per child and $500 per non-child dependent begin to phase out for taxpayers with modified adjusted gross income exceeding $400,000 for joint and $200,000 for single filers.

  • Estimated Tax Payments

    To avoid possible underpayment penalties, you are generally required to pay in through withholding or estimated tax payments the lesser of:

    1. One hundred percent of prior-year tax liability, (110% if AGI >$150,000) or,
    2. Ninety percent of current-year tax liability.
    2021 Estimated Tax Payments for Individuals are due by:
    • April 15, 2022
    • June 15, 2022
    • September 15, 2022
    • January 17, 2022
  • Net Investment Income Medicare Surtax

    The net investment income surtax on individuals equals 3.8% of the lesser of:

    • Net investment income*, or
    • The excess, if any, of
    • The individual’s modified adjusted gross income, over the threshold amount.
    Filing StatusThreshold Amount
    Married Filing Jointly$250,000
    Married Filing Separately$125,000
    Single, Head of Household$200,000

    *Common types of “net investment income” include interest, dividends, annuities, royalties, rents, net capital gain on investments, passive activities.

  • Capital Gain & Qualified Dividend Tax Rates for Noncorporate Taxpayers
    Single TaxpayerMarried Filing JointlyCapital Gain Tax Rate*Net Investment Income Medicare Surtax**Combined Tax Rate
    $0-$40,400$0-$80,8000%0%0%
    $40,401-$200,000$80,801-250,00015%0%15%
    $200,001-$445,850$250,001-$501,60015%3.8%18.8%
    $445,851$501,60120%3.8%23.8%

    * Short-term capital gains (held less than 12 months) are taxed at the same rate as ordinary income, gains on collectibles (including metals) are taxed at 28%, recapture gains on real estate are taxed at 25%.

    ** The 3.8% Net Investment Income Medicare surtax only applies to “net investment income” as defined in IRC 1411.

  • Estate Tax Rates

    The estate tax and gift tax exemption for 2020 is $11.7 million. The estate and gift tax rate on amounts in excess of $11.7 million is 40%. The estate tax exemption is portable between spouses resulting in a $23.4 million exemption per couple regardless of ownership of assets.

    Annual Gift Tax Exclusion

    Gifts per person, $15,000

    Joint gifts by spouse, $30,000

  • Business Provisions
    • Corporate income taxed at a flat rate of 21%.
    • Corporate Alternative Minimum Tax repealed.
    • Five-year carry back of net operating losses allowed for losses arising in 2018, 2019, 2020.
    Deductions Repealed
    • Business Entertainment Expenses
  • Employment Tax Rates
    EmployerTax RateWage Base
    Social Security6.20%$142,800
    Medicare+1.45%No Limit
    =7.65%
    EmployeeTax RateWage Base
    Social Security6.20%$142,800
    Medicare+1.45%No Limit
    =7.65%
    Self EmployedTax RateWage Base
    Social Security12.40%$142,800
    Medicare+2.90%No Limit
    =15.30%

    *Additional 0.9% Medicare tax is imposed on individuals who receive wages or self-employment income in excess of $200,000 ($250,000 for joint return, $125,000 for married filing separate).

  • Depreciation/Amortization

    3 – Year Assets (200% DB) Dies, molds, small tools

    3 – Year Assets (Straight-line) Computer software (if separately stated from hardware)

    5 – Year Assets (200% DB) Autos, light-/heavy-duty trucks, computers, typewriters, copiers, medical equipment, construction equipment, wholesale/retail equipment, private aircraft, some manufacturing equipment

    7 – Year Assets (200% DB) Most manufacturing equipment, office furniture, printing equipment

    15 – Year Assets (Straight-line) Intangible assets including goodwill, going concern value and covenants not to compete. Qualified improvement property

    27.5 – Year Assets (Straight-line) Rental houses, apartments, low-income housing

    39 – Year Assets (Straight-line) Commercial and industrial buildings, office buildings, shopping centers, warehouses, manufacturing facilities

    Annual Recovery

    Percent of Original Depreciable Basis Under 200% DB Method

     

    Recovery Year12345678
    Class
    3 Year33.3344.4514.817.41
    5 Year20.0032.0019.2011.5211.525.76
    7 Year14.2924.4917.4912.498.938.928.934.46
    Section 179 Expense Deduction

    Small Business taxpayers may elect to expense $1,050,000 million of certain new or used qualifying depreciable property placed in service in tax year 2021. Deduction is phased-out if the cost of qualifying property placed in service during the year exceeds $2.62 million.

    Special (Bonus) Depreciation Allowance

    Bonus depreciation allowance can be claimed for qualified property placed in service:

    • 100% for 2018 through 2022
    • 80% for 2023
    • 60% for 2024
    • 40% for 2025
    • 20% for 2026
    2021 Standard Mileage Deductions

    Use:

    • Business, $0.56 per mile
    • Charitable, $0.14 per mile
    • Medical or moving purposes for qualified active duty members of the Armed Forces, $0.16 per mile
  • Retirement Plan Limits
    Individual Limitations
    Under Age 50Age 50 & Up
    IRA$6,000 (a)$7,000 (a)
    Roth IRA$6,000 (b)$7,000 (b)
    401(k)/SARSEP Salary Deferrals$19,500$26,000
    Simple Plans$13,500$16,500

    PROFIT SHARING PLANS

    Corporate, 100% up to $58,000 (c)

    SEP – self-employed, 20% up to $58,000 (d)

    SEP – employee……………………….25% up to $57,000

    (a) Phaseout for deducting IRA contributions (qualified plan participants):

    Joint: $105,000 – $125,000 AGI
    Single or HOH: $66,000 – $76,000 AGI

    (b) Phaseout of Roth contribution eligibility:

    Joint: $198,000 – $208,000 AGI
    Single or HOH: $125,000 – $140,000 AGI

    (c) Overall plan is limited to 25% of total compensation of all eligible employees (capped at $285k per employee).

    (d) Of net self-employed income after 1/2 self-employment tax deduction (capped at $290k per employee).

  • Social Security Benefits

    Minimum earned income limit:

    AnnualMonthly
    Ages 62-65 years$18,960$1,580
    Months before individual reaches age 66$50,520$4,210
    Months after age 66No LimitNo Limit
  • Taxable Social Security

    Social Security received is taxable if AGI, plus tax-exempt interest, plus one-half of Social Security received, exceeds these base amounts:
    The taxable amount is the lesser of:
    a. Percent of the excess over the base amount, or
    b. 85% of benefit received

    Base Amount For50% Over Base85% Over Base
    Married Filing Jointly$32,001-$44,000$44,001+
    Single/Head of Household$25,001-$34,000$34,001+
    Married Filing Separately$0$0