2021 Tax: Tax Tip

Tax Topic

2021 - 2022 Updates

Standard Deduction

In 2021, the standard deduction is $12,550 for single filers and $25,100 for joint filers.

Foreign Earned Income Exclusion

For tax year 2021, the foreign earned income exclusion is $108,700 up from $107,600 for tax year 2020.

Gift Exclusion

The annual exclusion for gifts is $15,000 for calendar year 2021, as it was for calendar year 2020.

AMT

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.

IRS Contribution

$6,000 ($7,000 if you're age 50 or older)

401 K

Individuals can contribute to their 401(k) plans in 2022 (planning opportunity) to $20,500, up from $19,500 for 2021 and 2020.

Donations

Individuals, including married individuals filing separate returns, who take the standard deduction can claim a deduction of up to $300 on their 2021 federal income tax for their charitable cash contributions made to certain qualifying charitable organizations. For married individuals filing a joint return, the maximum deduction is increased to $600.

HSA

For 2020, those limits have gone up by $50, to $3,550, for self-only coverage; and by $100, to $7,100, for family coverage. (Planning Opportunity) You can contribute $3,650 for individual coverage, up from $3,600 for 2021, or $7,300 for family coverage, up from $7,200 for 2021 into an HSA.