For the taxable years beginning in 2021, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements remains $2,750.For tax year 2021, the monthly limitation for the qualified transportation fringe benefit remains $270, as is the monthly limitation for qualified parking.The revenue procedure contains a table providing maximum Earned Income Credit amount for other categories, income thresholds and phase-outs. The tax year 2021 maximum Earned Income Credit amount is $6,728 for qualifying taxpayers who have three or more qualifying children, up from a total of $6,660 for tax year 2020.The 2020 exemption amount was $72,900 and began to phase out at $518,400 ($113,400 for married couples filing jointly for whom the exemption began to phase out at $1,036,800). The Alternative Minimum Tax exemption amount for tax year 2021 is $73,600 and begins to phase out at $523,600 ($114,600 for married couples filing jointly for whom the exemption begins to phase out at $1,047,200).For 2021, as in 2020, 20, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.The lowest rate is 10% for incomes of single individuals with incomes of $9,950 or less ($19,900 for married couples filing jointly).12% for incomes over $9,950 ($19,900 for married couples filing jointly).22% for incomes over $40,525 ($81,050 for married couples filing jointly).24% for incomes over $86,375 ($172,750 for married couples filing jointly).32% for incomes over $164,925 ($329,850 for married couples filing jointly).35%, for incomes over $209,425 ($418,850 for married couples filing jointly).Marginal Rates: For tax year 2021, the top tax rate remains 37% for individual single taxpayers with incomes greater than $523,600 ($628,300 for married couples filing jointly).The personal exemption for tax year 2021 remains at 0, as it was for 2020 this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.For single taxpayers and married individuals filing separately, the standard deduction rises to $12,5, up $150, and for heads of households, the standard deduction will be $18,800 for tax year 2021, up $150. The standard deduction for married couples filing jointly for tax year 2021 rises to $25,100, up $300 from the prior year.The tax items for tax year 2021 of greatest interest to most taxpayers include the following dollar amounts: The tax year 2021 adjustments described below generally apply to tax returns filed in 2022.
The $435 additional tax will be adjusted for inflation. 31, 2019, the new additional tax is $435 or 100 percent of the amount of tax due, whichever is less, an increase from $330. The Consolidated Appropriation Act for 2020 increased the amount of the minimum addition tax for failure to file a tax return within 60 days of the due date. Highlights of changes in Revenue Procedure 2020-45 Revenue Procedure 2020-45 PDF provides details about these annual adjustments. WASHINGTON - The Internal Revenue Service today announced the tax year 2021 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes.
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