2021 Tax Brackets and Other Tax Changes

On October 26, 2020, the Internal Revenue Service published the 2021 tax rates, allowances, and thresholds applicable for the tax law provisions that are adjusted annually for inflation.

For 2021 returns filed by individual taxpayers in 2022, the top tax rate will continue to be 37% but the standard deduction, tax bracket ranges, other deductions, and phase-outs will increase.

  • Tax rates remain constant for 2021
  • Tax brackets, phase-outs for deductions and credits, thresholds, and ceilings increase
  • Contribution levels for retirement plans are unchanged
  • CARES Act RMD waiver, distribution and loan rules lapse after 2020

Read this article for details about changes in the standard deduction, tax brackets, capital gains, tax credits, the Alternative Minimum Tax (AMT), retirement plans, and 2020 retirement plan provisions that disappear in 2021.