{"id":7111,"date":"2021-02-17T10:30:11","date_gmt":"2021-02-17T15:30:11","guid":{"rendered":"http:\/\/10.130.206.81\/?p=7111"},"modified":"2021-02-17T11:21:24","modified_gmt":"2021-02-17T16:21:24","slug":"retirementandtaxes2021","status":"publish","type":"post","link":"http:\/\/10.130.206.81\/2021\/02\/17\/retirementandtaxes2021\/","title":{"rendered":"Key Retirement and Tax Numbers 2021"},"content":{"rendered":"

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key adjustments for 2021.<\/p>\n

Estate, Gift, and Generation-Skipping Transfer Tax<\/h2>\n
    \n
  • The annual gift tax exclusion (and annual generation-skipping transfer tax exclusion) for 2021 is $15,000, the same as in 2020.<\/li>\n
  • The gift and estate tax basic exclusion amount (and generation-skipping transfer tax exemption) for 2021 is $11,700,000, up from $11,580,000 in 2020.<\/li>\n<\/ul>\n

    Standard Deduction<\/h2>\n

    A taxpayer can generally choose to itemize certain deductions or claim a standard deduction on the federal income tax return. In 2021, the standard deduction is:<\/p>\n

      \n
    • $12,550 (up from $12,400 in 2020) for single filers or married individuals filing separate returns<\/li>\n
    • $25,100 (up from $24,800 in 2020) for married individuals filing joint returns<\/li>\n
    • $18,800 (up from $18,650 in 2020) for heads of households<\/li>\n<\/ul>\n

      The additional standard deduction amount for the blind or aged (age 65 or older) in 2021 is:<\/p>\n

        \n
      • $1,700 (up from $1,650 in 2020) for single filers and heads of households<\/li>\n
      • $1,350 (up from $1,300 in 2020) for all other filing statuses<\/li>\n<\/ul>\n

        Special rules apply if you can be claimed as a dependent by another taxpayer.<\/p>\n

        IRAs<\/h2>\n

        The combined annual limit on contributions to traditional and Roth IRAs is $6,000 in 2021 (the same as in 2020), with individuals age 50 and older able to contribute an additional $1,000. The limit on contributions to a Roth IRA phases out for certain modified adjusted gross income (MAGI) ranges. For individuals who are covered by a workplace retirement plan, the deduction for contributions to a traditional IRA also phases out for certain MAGI ranges. (The limit on nondeductible contributions to a traditional IRA is not subject to phase-out based on MAGI.)<\/p>\n<\/div>

        <\/span><\/div>

        Employer Retirement Plans<\/h2>\n
          \n
        • Employees who participate in 401(k), 403(b), and most 457 plans can defer up to $19,500 in compensation in 2021 (the same as in 2020); employees age 50 and older can defer up to an additional $6,500 in 2021 (the same as in 2020).<\/li>\n
        • Employees participating in a SIMPLE retirement plan can defer up to $13,500 in 2021 (the same as in 2020), and employees age 50 and older can defer up to an additional $3,000 in 2021 (the same as in 2020).<\/li>\n<\/ul>\n

          Kiddie Tax: Child’s Unearned Income<\/h2>\n

          Under the kiddie tax, a child’s unearned income above<\/p>\n

          $2,200 in 2021 (the same as in 2020) is taxed using the parents’ tax rates.<\/p>\n<\/div><\/div><\/div>