The full report is available here (registration required). The 2021 tax projections are just one of the features from Bloomberg Tax & Accounting. The Internal Revenue Service (IRS) will publish the official tax brackets and other tax numbers for 2021 later this year, likely in October. Remember that these are just projections. That means that you can gift $15,000 per person to as many people as you want with no federal gift tax consequences in 2021 if you split gifts with your spouse, that total is $30,000 per person. The annual exclusion for federal gift tax purposes will remain at $15,000 in 2021. The federal estate tax exemption for decedents dying will increase to $11.7 million per person or $23.4 million per married couple in 2021. Revocation or Denial of Passportįor 2021, the threshold amount for seriously delinquent tax debt before your passport is certified to the State Department to be revoked is $54,000. Foreign Earned Income Exclusionįor 2021, the foreign earned income exclusion amount is $108,700. If the plan permits the carryover of unused amounts, the maximum carryover amount is $550.
Health Flexible Spending Arrangementsįor 2021, the dollar limitation for contributions to health flexible spending arrangements is $2,750. Student Loan Interestįor 2021, the $2,500 deduction for interest paid on student loans begins to phase out when modified adjusted gross income (MAGI) hits $70,000 ( $140,000 for taxpayers filing a joint return) and is completely phased out when MAGI hit $85,000 ( $170,000 for taxpayers filing a joint return). Under the TCJA, your child must pay taxes on their unearned income, but if that amount is more than $1,100, but less than $11,000, you may be able to elect to include that income on your return rather than file a separate return for your child. For 2021, those amounts will look like this:įor 2021, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,100 or (2) the sum of $350 and the individual’s earned income (not to exceed the regular standard deduction amount).
The deduction is subject to threshold and phase-in amounts. Section 199A deduction (also called the pass-through deduction)Īs part of the TCJA, sole proprietors and owners of pass-through businesses are eligible for a deduction of up to 20% to bring the tax rate lower for qualified business income. However, as a result of the TCJA, there are no Pease limitations in 2021. The additional standard deduction amount will increase to $1,700 if the individual is also unmarried and not a surviving spouse.įor those high-income taxpayers who itemize their deductions, the Pease limitations, named after former Representative Don Pease (D-OH) used to cap or phase out certain deductions. The additional standard deduction amount for the aged or the blind will be $1,350. Here are the projected standard deduction amounts for 2021:Īlso, for 2021, it’s predicted that the standard deduction for an individual who may be claimed as a dependent by another taxpayer will not be more than (1) $1,100, or (2) the sum of $350 plus the individual’s earned income. With inflation, those amounts remain the same for most taxpayers next year. Standard DeductionĪs part of the TCJA, the amount of the standard deduction doubled for most taxpayers in 2018. If the two amounts are confusing, here’s the skinny: the first amount, $4,250, is the amount that Bloomberg Tax believes is the literal application of the applicable IRC provision, but the amount in parentheses is the amount they expect the IRS to publish.
You were generally allowed one exemption for yourself (unless you could be claimed as a dependent by another taxpayer), one exemption for your spouse if you filed a joint return and one personal exemption for each of your dependents-but that's no longer the case.įor purposes of the definition of a qualifying relative, the exemption amount is projected to be $ 4,250 ($4,300). Personal exemptions used to decrease your taxable income before you determined the tax due. As part of the TCJA, there are no personal exemption amounts for 2021.
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