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 Over	But Not Over	Is Taxed At
  $0	$19,900	10%
  $19,900	$81,050	12%
  $81,050	$172,750	22%
  $172,750	$329,850	24%
  $329,850	$418,850	32%
  $418,850	$628,300	35%
  $628,300		37%

  Single Taxpayers

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$9,950	10%
  $9,950	$40,525	12%
  $40,525	$86,375	22%
  $86,375	$164,925	24%
  $164,925	$209,425	32%
  $209,425	$523,600	35%
  $523,600		37%

  Heads of Household

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$14,200	10%
  $14,200	$54,200	12%
  $54,200	$86,350	22%
  $86,350	$164,900	24%
  $164,900	$209,400	32%
  $209,400	$523,600	35%
  $523,600		37%

  Estates & Trusts

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$2,650	10%
  $2,650	$9,550	24%
  $9,550	$13,050	35%
  $13,050		37%

  Alternative Minimum Tax

  Tax Rate on AMTI	26% up to	$199,900
  	28% over	$199,900

  	Exemption Amount	Phase-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  Personal Exemptions - Repealed Deduction Limitations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  Deductions Repealed (as of Jan 1, 2018)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 Status	Threshold 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 Taxpayer	Married Filing Jointly	Capital Gain Tax Rate*	Net Investment Income Medicare Surtax**	Combined Tax Rate
  $0-$40,400	$0-$80,800	0%	0%	0%
  $40,401-$200,000	$80,801-250,000	15%	0%	15%
  $200,001-$445,850	$250,001-$501,600	15%	3.8%	18.8%
  $445,851	$501,601	20%	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

  Employer	Tax Rate	Wage Base
  Social Security	6.20%	$142,800
  Medicare	+1.45%	No Limit
  	=7.65%
  Employee	Tax Rate	Wage Base
  Social Security	6.20%	$142,800
  Medicare	+1.45%	No Limit
  	=7.65%
  Self Employed	Tax Rate	Wage Base
  Social Security	12.40%	$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 Year	1	2	3	4	5	6	7	8
  Class
  3 Year	33.33	44.45	14.81	7.41
  5 Year	20.00	32.00	19.20	11.52	11.52	5.76
  7 Year	14.29	24.49	17.49	12.49	8.93	8.92	8.93	4.46

  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 50	Age 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:

  	Annual	Monthly
  Ages 62-65 years	$18,960	$1,580
  Months before individual reaches age 66	$50,520	$4,210
  Months after age 66	No Limit	No 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 For	50% Over Base	85% 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