federal taxes

The IRS has released its updates for the tax year 2021. As 2020 draws to a close, it’s hard to imagine even beginning to think about the tax year 2021, but the IRS has just released 2021 tax rates, standard deduction amounts, and more.  These updates are not for you to use in 2021 on your tax year 2020 filings, but rather the information you’ll be using in 2022 to complete your taxes for the tax year 2021.  Let’s break down some of the updates. Tax Brackets, Rates, and Deductions Forbes has some great infographics that clearly illustrate the tax rates and brackets both for individuals and for married individuals filing jointly. For married individuals filing jointly: 10% - for taxable income up to $19,900 12% - for taxable income between $19,900 and $81,050 22% - for taxable income between $81,050 and $172,750 24% - for taxable income between $172,750 and $329,850 32% - for taxable income between $329,850 and $418,850 35% - for taxable income between $418,850 and $628,300 37% - for taxable income over $628,300 For individual taxpayers: 10% - for taxable income up to $9,950 12% - for taxable income between $9,950 and $40,525 22% - for taxable income between $40,525 and $86,375 24% - for taxable income between $86,375 and $164,925 32% - for taxable income between $164,925 to $209,425 35% - for taxable income between $209,425 to $523,600 37% - for taxable income over $523,600 Along with these brackets and rates, the IRS also announced an increase in the standard deduction of $300 for married couples filing jointly and $150 for individuals for tax year 2021 – bringing that total to $25,100 and $12,550, respectively. The standard deduction for heads of households will also increase by $150. Exemptions For the tax year 2021, the AMT (alternative minimum tax) exemption amounts have been adjusted for inflation. They are as follows:  Individuals: $73,600 Married filing jointly and surviving …

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