![]() For those unfamiliar, tax deductions are kind of important as they can reduce your Adjusted Gross Income or AGI. But, at least you have an idea of what to expect.Īdditionally, you should anticipate some new deductions on your taxes for 2021. Of course, you should review these changes over at irs.gov. But, Social Security payroll taxes rose to $137,7. For example, if married and filing jointly, it will go up from $55,952 to $56,844. Both the income limits and the maximum credit will be higher for EITC. A More Valuable Earned Income Tax Credit.After being adjusted for inflation, the base contribution limit for 401(k) plans is now $19,500, which is $500 more than the previous year. Increased Contribution Limits For Limited Workplace Retirement Accounts.For example, if you’re single and make $85,525 to $163,300 it will rise 24%. For next year, however, expect income tax brackets to rise. Due to inflation, tax brackets tend to fluctuate annually. Because of the Coronavirus Aid, Relief, and Economic Security Act of 2020, aka the CARES Act, waived required minimum distributions (RMDs) for 2020. Family coverage will increase $100 to $7,100. Self-only coverage will increase $50 to $3,550. Higher Health Savings Account (HSA) Limits.To quickly catch you up to speed, your taxes will differ in 2021 in the following ways: The reason? There are several changes that you may have overlooked because, well, there was a lot going on in 2020. Even though you probably just filed your taxes in July, thanks COVID, it’s never too early to get a head start on the one you’ll file in April 2021. ![]()
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