Important Tax Figures for 2021

Written by Julie Miller | Jan 28, 2021 12:44:39 AM

The following table provides some important federal tax information for 2021, as compared with 2020. Some of the dollar amounts are unchanged and some changed only slightly due to inflation.

Social Security/ Medicare 2021 2020
Social Security Tax Wage Base $142,800 $137,700
Medicare Tax Wage Base No limit No limit
Employee portion of Social Security 6.2% 6.2%
Employee portion of Medicare 1.45% 1.45%
Individual Retirement Accounts 2021 2020
Roth IRA Individual, up to 100% of earned income $6,000 $6,000
Traditional IRA Individual, up to 100% of earned Income $6,000 $6,000
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older  $1,000 $1,000
Qualified Plan Limits 2021 2020
Defined Contribution Plan limit on additions on Sections 415(c)(1)(A) $58,000 $57,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) $230,000 $230,000
Maximum compensation used to determine contributions $290,000 $285,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $19,500 $19,500
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older $6,500 $6,500
SIMPLE deferrals (Section 408(p)(2)(A)) $13,500 $13,500
SIMPLE additional “catch-up” contributions for employees age 50 and older $3,000 $3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B)) $130,000 $130,000
Compensation defining key employee (officer) $185,000 $185,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c)) $650 $600
Driving Deductions 2021 2020
Business mileage, per mile 56 cents 57.5 cents
Charitable mileage, per mile 14 cents 14 cents
Medical and moving, per mile 16 cents 17 cents
Business Equipment 2021 2020
Maximum Section 179 deduction $1,050,000 $1,040,000
Phase out for Section 179 $2.62
million
$2.59
million
Transportation Fringe Benefit Exclusion 2021 2020
Monthly commuter highway vehicle and transit pass $270 $270
Monthly qualified parking $270 $270
Standard Deduction 2021 2020
Married filing jointly $25,100 $24,800
Single (and married filing separately) $12,550 $12,400
Heads of Household $18,800 $18,650
Domestic Employees 2021 2020
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $2,300 $2,200
Business Meals
2021 2020
Deduction for eligible business-related food and beverage expenses 100%* 50%
Estate Tax 2021 2020
Federal estate tax exemption $11.7 million $11.58 million
Maximum estate tax rate 40% 40%
Annual Gift Exclusion 2021 2020
Amount you can give each recipient $15,000 $15,000

* Incurred in restaurants. This is part of the Consolidated Appropriations Act, signed into law on December 27, 2020.