Estimated reading time: 1 minute, 49 seconds

IRS Lists 2021 Tax Inflation Adjustments

The Internal Revenue Service has published the annual inflation adjustments for more than 60 tax provisions for tax year 2021. These include tax rate schedules and other tax changes and these are detailed in Revenue Procedure 2020-45 PDF.

 The minimum additional tax for failure to file a tax return within 60 days of the date has been raised under the Consolidated Appropriation Act for 2020. For returns due after Dec. 31, 2019, additional tax is $435 or 100 percent of the amount of tax due, whichever is less, an increase from $330. This amount will be adjusted for inflation in future tax years.

Among important changes are the increase in the standard deduction. For couples filing jointly, the deduction rises to $25,100, up $300 from 2020. The standard deduction for single taxpayers and married individuals filing separately increases to $12,550, an increase of $150, and for heads of household it will be $18,800, a rise of $150.

Personal exemptions were eliminated under the Tax Cuts and Jobs Act and remain zero. However, that legislation also ended limits on itemized deductions.

The Alternative Minimum Tax exemption amount for tax year 2021 is $73,600, phasing out at starting at $523,600. The exemption for married couples married  filing jointly is $114,600 and begins to phase out at $1,047,200. The maximum Earned Income Credit amount is $6,728 for qualifying taxpayers with three or more qualifying children, up from $6,660 for tax year 2020. A table providing maximum Earned Income Credit amount for other categories, income thresholds and phase-outs is included in the revenue procedures.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Read 311 times
Rate this item
(0 votes)

Visit other PMG Sites:

click me
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.