2021 Tax Rates, Schedules and Contribution Limits

A summary of useful tax information to help you prepare for the 2021 tax year.

Income Tax

Married/Filing Jointly or Qualifying Widow(er)s

If taxable income is over But not over The tax is Of the amount over
$0 $19,900 $0.00 + 10% $0
$19,900 $81,050 $1,990 + 12% $19,900
$81,050 $172,750 $9,328 + 22% $81,050
$172,750 $329,850 $29,502 + 24% $172,750
$329,850 $418,850 $67,206 + 32% $329,850
$418,850 $628,300 $95,686 + 35% $418,850
$628,300 - $168,993.50 + 37% $628,300

 

Single

If taxable income is over But not over The tax is Of the amount over
$0 $9,950 $0.00 + 10% $0
$9,950 $40,525 $995 + 12% $9,950
$40,525 $86,375 $4,664 + 22% $40,525
$86,375 $164,925 $14,751 + 24% $86,375
$164,925 $209,425 $33,603 + 32% $164,925
$209,425 $523,600 $47,843 + 35% $209,425
$523,600 - $157,804.25 + 37% $523,600

 

Estates and trusts

If taxable income is over But not over The tax is Of the amount over
$0 $2,650 $0.00 + 10% $0
$2,650 $9,550 $265 + 24% $2,650
$9,550 $13,050 $1,921 + 35% $9,550
$13,050 - $3,146 + 37% $13,050


Tax on corporations and other businesses

  • 21% tax rate applied on C-corporation income
  • Taxpayers may generally deduct up to 20% of the qualified business income (QBI) of S corporations, partnerships, and sole proprietorships (reduced by net capital gain and qualified dividends), subject to limitations:
    • Deduction generally not available for a Specified Service Trade or Business (SSTB) if taxable income exceeds $214,900 (single) or $429,800 (married/filing jointly)
      • The deduction is subject to a phaseout unless taxable income is at or below $164,900 (single) or $329,800 (married/filing jointly)
    • If taxable income exceeds $214,900 (single) or $429,800 (married/filing jointly), the deduction is limited to the lesser of:
      • 20% of QBI or
      • The greater of
        • 50% ofW-2 wages paid by each business or
        • 25% of W-2 wages paid by each business plus 2.5% of the unadjusted basis of qualified property
    • Wage and qualified property limitations are not applicable to taxable incomes at or below $164,900 (single) or $329,800 (married/filing jointly) and are fully phased in once taxable income exceeds $214,900 (single) or $429,800 (married/filing jointly)

    Employer retirement plans

     

    Tax on capital gains and qualified dividends

    Single Married/Filing jointly/Qualifying widow(er) Tax rate
    $0 - $40,400 $0 - $80,800 0%
    Over $40,400 but not over $445,850 Over $80,800 but not over $501,600 15%
    Over $445,850 Over $4501,600 20%

    Additional 3.8% federal net investment income (NII) tax applies to individuals on the lesser of NII or modified AGI in excess of $200,000 (single) or $250,000 (married/filing jointly and qualifying widow(er)s). Also applies to any trust or estate on the lesser of undistributed NII or AGI in excess of the dollar amount at which the estate/trust pays income taxes at the highest rate ($13,050).

    Kiddie Tax*

    Child's unearned income above $2,200 is generally subject to taxation at the parent's marginal tax rate; unearned income above $1,100 but not more than $2,200 is taxed at the child's tax rate.

    * Applies if either parent of the child is alive at the close of the taxable year, the child does not file a joint return for the taxable year, and the child either:

    • has not attained age 18 by close of the year
    • has attained age 18 before the close of the year, but the child's earned income represents not more than one half of support needs and the child has not attained age 19 by the close of the year, or
    • the child is a full-time student who has not attained age 24 as of the close of the year and the child's earned income represents not more than one half of support needs.

    Preferential rates on long-term capital gains and qualified dividends are applicable; 3.8% federal NII tax is imposed separately on each child if modified AGI exceeds threshold amount s stated above.
     

    Child tax credit

    • $2,000 per "qualifying child" (who has not attained age 17 during the year); phased out as income exceeds $400,000 (married/filingjointly) or $200,000 (all other); $1,400 per child is refundable
    • $500 nonrefundable credit for qualified dependents other than qualifying children (without limits)

    Standard deductions

    Filing Status Annual Additional
    age 65+ or blind
    Married/Filing jointly and qualifying widow(er)s $25,100 $1,350
    Single $12,550 $1,700

     

    Health savings accounts contribution limits

    Filing Status Limit
    Individual $3,600
    Family $7,200

    Catch-up contribution: Taxpayers who are 55 or older in 2021 may contribute an additional $1,000, or a total of $4,600 for individuals and $8,200 for families.

    Deduction for mortgage interest

    Deduction on interest for qualifying mortgages up to $750,000 ($375,000 if married/filing separately); homes under agreement before 12/15/17 for purchase prior to 1/1/18 (provided purchase occurred by 4/1/18) grandfathered under previous $1,000,000 ($500,000 if married/filing separately) limits Interest on home equity lines of credit (HELOC) deductible in certain cases where proceeds are utilized to acquire or improve a residence.

    Deduction for state and local taxes

    Individuals maydeduct state and local income (or sales) taxes and real and personal property taxes up to $10,000 ($5,000 if married filing separately) in the aggregate.


    Maximum Qualified Long-Term-Care insurance premiums eligible for deduction

    Age 40 or less >40, ≤50 >50, ≤60 >60, ≤70 Over 70
    2021 $450 $850 $1,690 $4,520 $5,640

     

    Traditional IRAs

    Maximum annual contribution

    • Lesser of compensation or $6,000
    • Up to $6,000 contribution can also be made for nonworking spouse
    • Catch-up contributions (age 50 and over): $1,000

    Traditional IRA deductibility table

    Filing Status Covered by employer's
    retirement plan
    Modified AGI 2021 Modified AGI 2020 Deductibility
    Single No Any amount Any amount Full
      Yes $66,000 or less $65,000 or less Full
      Yes $66,001 - $75,999 $65,001 - $74,999 Partial
      Yes $76,000 or more $75,000 or more None
    Married/Jointly Neither spouse covered Any amount Any amount Full
    Married/Jointly Both spouses covered $105,000 or less $104,000 or less Full
        $105,001 - $124,999 $104,001 - $123,999 Partial
        $125,000 or more $124,000 or more None
    Married/Jointly Yes, but spouse is not covered $105,000 or less $104,000 or less Full
        $105,001 - $124,999 $104,001 - $123,999 Partial
        $125,000 or more $124,000 or more None
    Married/Jointly No, but spouse is covered $198,000 or less $196,000 or less Full
        $198,001 - $207,999 $196,001 - $205,999 Partial
        $208,000 or more $206,000 or more None

     

    Roth IRAs

    Maximum annual contribution

    • Lesser of compensation or $6,000
    • Up to $6,000 contribution can also be made for nonworking spouse
    • Catch-up contributions (age 50 and over): $1,000

    Contribution eligibility

    Modified AGI is less than $125,000 (single) or $198,000 (married/filing jointly); phaseouts apply if modified AGI is $125,000 - $139,999 (single) or $198,000 - $207,999 (married/filing jointly).

    Deductibility

    Contributions to Roth IRAs are not deductible.

    Conversion eligibility

    There is no income restriction on eligibility for a Roth IRA conversion.

    Social Security Benefit

    Base amount of modified AGI causing Social Security benefits to be taxable

    Filing Status Up to 50% taxable Up to 85% taxable
    Married/Filing jointly $32,001 - $44,000 >$44,000
    Single $25,001 - $34,000 >$34,000

     

    Maximum earnings before Social Security benefits are reduced

    * Interim annual limit of $50,520 applies for months prior to attaining full retirement age during year individual reaches full retirement age ($1 withheld for every $3 above limit).

     

    Maximum compensation subject to FICA taxes

    OASDI and HI tax rate: 12.4% OASDI and 2.9% HI (15.3% combined) for self- employed; 6.2% and1.45% (7.65% combined) for employees. An additional 0.9% HI tax applies on individuals with wages or self-employment income in excess of $200,000 (single and qualifying widow(er)s) or $250,000 (married/ filing jointly).
     

    Death/gifts occurring in 2021*

    (Subtract applicable credit from calculated tax.)

    If gift/gross is over But not over The tax is Of the amount over
    $0 $10,000 $0 + 18% $0
    $10,000 $20,000 $1,800 + 20% $10,000
    $20,000 $40,000 $3,800 + 22% $20,000
    $40,000 $60,000 $8,200 + 24% $40,000
    $60,000 $80,000 $13,000 + 26% $60,000
    $80,000 $100,000 $18,200 + 28% $80,000
    $100,000 $150,000 $23,800 + 30% $100,000
    $150,000 $250,000 $38,800 + 32% $150,000
    $250,000 $500,000 $70,800 + 34% $250,000
    $500,000 $750,000 $155,800 + 37% $500,000
    $750,000 $1,000,000 $248,300 + 39% $750,000
    $1,000,000 - $345,800 + 40% $1,000,000

    * Annual gift tax exclusion: individual, $15,000; married electing split gifts, $30,000.

    Combined lifetime gift tax and gross estate tax exemption: $11,700,000
    GST tax exemption: $11,700,000

    Higher education tax credits

    Modified AGI phaseouts for American Opportunity Tax Credit

     

    AGI phaseouts for Lifetime Learning Credit

     

    2019 AMT exemptions

    Phases out beginning with alternative minimum taxable income over $1,047,200 (married/filing jointly and qualifying widow(er)s) or $523,600 (single filers); AMT ordinary income rate increases from 26% to 28% for alternative minimum taxable income over $199,900 (married/filing jointly and qualifying widow(er)s, single, and estates and trusts).