2021 IRS tax changes

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The tax codes have been released for 2021 by the IRS.  The tax brackets remain the same but the income limits were increased account for inflation.

Along with the income limit increase, the standard deduction for 2021 was also increased.  If you a married but filing separately, or filing individually, the standard deduction is $12,550, increased by $150.  If you are married and filing jointly, the standard deduction is $25,100, increased by $300.  For heads of households, the standard deduction is $18,800, increased by $150.

Below are the tax brackets for 2021 on the left and you can compare them with the 2020 rates on the right.

Filing Single: 20212020
10%: Up to $9,950
12%: Income of $9,951 to $40,525
22%: Income of $40,526 to $86,375
24%: Income of $86,376 to $164,925
32%: Income of $164,926 to $209,425
35%: Income of $209,426 to $523,600
37%: Income over $523,600
10%: Up to $9,875
12%: Income of $9,876 to $40,125
22%: Income of $40,126 to $85,525
24%: Income of $85,526 to $163,300
32%: Income of $163,301 to $207,350
35%: Income of $207,351 to $518,400
37%: Income over $518,400
Married, filing jointly: 20212020
10%: Up to $19,900
12%: Income of $19,901 to $81,050
22%: Income of $81,051 to $172,750
24%: Income of $172,751 to $329,850
32%: Income of $329,851 to $418,850
35%: Income of $418,851 to $628,300
37%: Income over $628,300
10%: Up to $19,750
12%: Income of $19,751 to $80,250
22%: Income of $80,251 to $171,050
24%: Income of $171,051 to $326,600
32%: Income of $326,601 to $414,700
35%: Income of $414,701 to $622,050
37%: Income over $622,050
Married, filing separately: 20212020
10%: Up to $9,950
12%: Income of $9,951 to $40,525
22%: Income of $40,526 to $86,375
24%: Income of $86,376 to $164,925
32%: Income of $164,926 to $209,425
35%: Income of $209,426 to $314,150
37%: Income over $314,150
10%: Up to $9,875
12%: Income of $9,876 to $40,125
22%: Income of $40,126 to $85,525
24%: Income of $85,526 to $163,300
32%: Income of $163,301 to $207,350
35%: Income of $207,351 to $311,025
37%: Income over $311,025
Heads of household: 20212020
10%: Up to $14,200
12%: Income of $14,201 to $54,200
22%: Income of $54,201 to $86,350
24%: Income of $86,351 to $164,900
32%: Income of $164,901 to $209,400
35%: Income of $209,401 to $523,600
37%: Income over $523,600
10%: Up to $14,100
12%: Income of $14,101 to $53,700
22%: Income of $53,701 to $85,500
24%: Income of $85,501 to $163,300
32%: Income of $163,301 to $207,350
35%: Income of $207,351 to $518,400
37%: Income over $518,400

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