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Change in tax brackets
Due to extraordinary circumstances, there are slight changes to the existing tax brackets. You may fall into a different bracket this year than you did last year. Here is a breakdown:
Unmarried individuals
| 2020 | 2021 |
| 10% - up to $9,875 | 10% - up to $9,950 |
| 12% - $9,876 to $40,125 | 12% - $9,951 to $40,525 |
| 22% - $40,126 to $85,525 | 22% - $40,526 to $86,375 |
| 24% - $85,526 to $163,300 | 24% - $86,376 to $164,925 |
| 32% - $163,301 to $207,350 | 32% - $164,926 to $209,425 |
| 35% - $207,351 to $518,400 | 35% - $209,426 to $523,600 |
| 37% - $518,401 or more | 37% - $523,601 or more |
Married individuals filing joint returns
| 2020 | 2021 |
| 10% - up to $19,750 | 10% - up to $19,900 |
| 12% - $19,751 to $80,250 | 12% - $19,901 to $81,050 |
| 22% - $80,251 to $171,050 | 22% - $81,051 to $172,750 |
| 24% - $171,051 to $326,600 | 24% - $172,751 to $329,850 |
| 32% - $326,601 to $414,700 | 32% - $329,851 to $418,850 |
| 35% - $414,701 to $622,050 | 35% - $418,851 to $628,300 |
| 37% - $622,051 or more | 37% - $628,301 or more |
Head of household
| 2020 | 2021 |
| 10% - up to $14,100 | 10% - up to $14,200 |
| 12% - $14,101 to $53,700 | 12% - $14,201 to $54,200 |
| 22% - $53,701 to $85,500 | 22% - $54,201 to $86,350 |
| 24% - $85,501 to $163,300 | 24% - $86,351 to $164,900 |
| 32% - $163,301 to $207,350 | 32% - $164,901 to $209,400 |
| 35% - $207,351 to $518,400 | 35% - $209,401 to $523,600 |
| 37% - $518,400 or more | 37% - $523,601 or more |
Change in standard deduction
The standard deduction is the dollar amount people can deduct from their taxable income if they do not choose to itemize their deductions.
| Filing Type | 2020 | 2021 |
| Single/married but filing separate | $12,400 | $12,550 |
| Married filing jointly | $24,800 | $25,100 |
| Head of household | $18,650 | $18,800 |
The earned income tax credit is a refundable tax credit for low to moderate income individuals and couples. The benefit amount depends on income and amount of children. This year’s earned income tax credit is $6,728. This is a $100 increase from last year.
Changes in Section 911 - foreign earned income exclusion
The foreign earned income exclusion applies to US citizens who reside or work outside of the United States. This year’s foreign earned income exclusion is $108,700. This is a $1,000 increase from last year.
Changes in the adoption tax credit
The adoption tax credit is offered to adoptive parents in the United States. The maximum amount of this tax credit for this year is $14,440. This is a $360 increase from last year.
The world is forever changing. If you need assistance with filing your tax return this year, contact us. We’re here to help.
