For 2021, the highest income tax bracket of 37 percent applies when taxable income hits:
- $628,300 for married individuals filing jointly and surviving spouses,
- $523,600 for single individuals and heads of households,
- $314,150 for married individuals filing separately, and
- $13,050 for estates and trusts.
The standard deduction for 2021 is:
- $25,100 for married individuals filing jointly and surviving spouses,
- $18,800 for heads of households, and
- $12,550 for single individuals and married individuals filing separately.
- $1,100 or
- the sum of $350 plus the dependent's earned income.
- $1,350 for married taxpayers and surviving spouses, or
- $1,700 for other taxpayers.
The alternative minimum tax (AMT) exemption for 2021 is:
- $114,600 for married individuals filing jointly and surviving spouses,
- $73,600 for single individuals and heads of households,
- $57,300 for married individuals filing separately, and
- $25,700 for estates and trusts.
- $1,047,200 for married individuals filing jointly and surviving spouses,
- $523,600 for single individuals, heads of households, and married individuals filing separately, and
- $85,650 for estates and trusts.
For tax years beginning in 2021, taxpayers can expense up to $1,050,000 in Code Sec. 179 property. However, this dollar limit is reduced when the Section 179 property placed in service during the year exceeds $2,620,000.
Estate and Gift Tax Adjustments for 2021
The following inflation adjustments apply to federal estate and gift taxes in 2021:
- the gift tax exclusion is $15,000 per donee, or $159,000 for gifts to spouses who are not U.S. citizens;
- the federal estate tax exclusion is $11,700,000; and
- the maximum reduction for real property under the special valuation method is $1,190,000.
The maximum foreign earned income exclusion amount in 2021 is $108,700.
The IRS also provided inflation-adjusted amounts for the:
- adoption credit,
- lifetime learning credit,
- earned income credit,
- excludable interest on U.S. savings bonds used for education,
- various penalties, and
- many other provisions.
These inflation adjustments generally apply to tax years beginning in 2021, so they affect most returns that will be filed in 2022. However, some specified figures apply to transactions or events in calendar year 2021.