If you are like most people, you probably can't wait to put 2020 behind you.  With that in mind, we wanted to share some of the key figures announced by the Internal Revenue Service (IRS) for 2021. Standard Deduction

• Single or married filing separately: Increases to $12,550

• Head of household: Increases to $18,800

• Married filing jointly: Increases to $25,100

401k/403b/457/Thrift Savings Plan Contribution Limits

• Employee contribution limit: Remains unchanged at $19,500

• Overall plan limit: Increases to $58,000

• If you turn age 50 in 2021, you can make an additional $6,500 "catch-up contribution"

SEP IRAs and Solo 401(k)s

• Overall contribution amount: Increases to $58,000

• Compensation limit used for calculation: Increases to $290,000

Traditional IRA Contribution Limits and Phase-outs

• Contribution limit: Remains unchanged at $6,000

• Catch-up contribution: Remains unchanged at $1,000

• AGI phase-out of deduction for taxpayers covered by a workplace retirement plan: Between $66,000 and $76,000 for singles and heads of household, up from $65,000 and $75,000 in 2020. Between $105,000 and $125,000 for married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, up from $104,000 to $124,000.  Between $198,000 and $208,000 for married couples filing jointly, in which the spouse who makes the IRA contribution is NOT covered by a workplace retirement plan, up from $196,000 and $206,000 in 2020.

Roth IRA Contribution Limits and Phase-outs

• Contribution limit: Remains unchanged at $6,000

• Catch-up contribution: Remains unchanged at $1,000

• AGI phase-out of Roth IRA contributions: Between $198,000 to $208,000 for married couples filing jointly, up from $196,000 to $206,000 in 2020. For singles and heads of household, between $125,000 to $140,000, up from $124,000 to $139,000 in 2020.

Social Security

• Earnings subject to Social Security tax: Increases to $142,800

• Earnings limit for workers younger than "full" retirement age: Increases to $18,960 ($1 will be deducted from your benefits for each $2 you earn over $18,960)

• Earnings limit for workers reaching "full" retirement age in 2021: Increases to $50,520 ($1 will be deducted from your benefits for each $3 you earn over $50,520)  

• Earnings limit for workers at "full" retirement for all of 2021: Remains unchanged at unlimited 

Estate and gift tax exemption

• Estate tax exemption: Increases to $11.7m per individual (this is the Federal amount.  State amounts may vary)

• Annual gift exclusion: Remains unchanged at $15,000 (if you are married, you and your spouse can each give $15,000)

We hope you found the above helpful. And again, we are available if you have questions, concerns or need assistance.