Important Tax Figures for 2021

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/ Medicare20212020
Social Security Tax Wage Base $142,800$137,700
Medicare Tax Wage Base No limit
No limit
Employee portion of Social Security6.2%6.2%
Employee portion of Medicare1.45%1.45%
Individual Retirement Accounts20212020
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 Limits20212020
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 Deductions20212020
Business mileage, per mile56 cents
57.5 cents
Charitable mileage, per mile14 cents14 cents
Medical and moving, per mile16 cents17 cents
Business Equipment20212020
Maximum Section 179 deduction$1,050,000$1,040,000
Phase out for Section 179$2.62
million
$2.59
million
Transportation Fringe Benefit Exclusion20212020
Monthly commuter highway vehicle and transit pass$270$270
Monthly qualified parking$270$270
Standard Deduction20212020
Married filing jointly $25,100$24,800
Single (and married filing separately)$12,550$12,400
Heads of Household$18,800$18,650
Domestic Employees20212020
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.$2,300$2,200
Business Meals
20212020
Deduction for eligible business-related food and beverage expenses100%*50%
Estate Tax20212020
Federal estate tax exemption$11.7 million
$11.58 million
Maximum estate tax rate40%40%
Annual Gift Exclusion20212020
Amount you can give each recipient$15,000$15,000

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

Categories: February 2021
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