1. Tax Brackets
| 2021 Marginal Tax Rates | Single Tax Bracket | Married Filing Jointly Tax Bracket | Head of Household Tax Bracket | Married Filing Separately Tax Bracket |
| 10% | $0–9,950 | $0–19,900 | $0–14,200 | $0–9,950 |
| 12% | $9,951–40,525 | $19,901–81,050 | $14,201–54,200 | $9,951–40,525 |
| 22% | $40,526–86,375 | $81,051–172,750 | $54,201–86,350 | $40,526–86,375 |
| 24% | $86,376–164,925 | $172,751–329,850 | $86,351–164,900 | $86,376–164,925 |
| 32% | $164,926–209,425 | $329,851–418,850 | $164,901–209,400 | $164,926–209,425 |
| 35% | $209,426–523,600 | $418,851–628,300 | $209,401–523,600 | $209,426–314,150 |
| 37% | Over $523,600 | Over $628,300 | Over $523,600 | Over $314,150 |
* Biden’s proposal: increase the top tax rate to $39.6% beginning in 2022.
2. Standard Deduction
| Filing Status | 2021 | 2020 |
| Single | $12,550 | $12,400 |
| Married Filing Jointly | $25,100 | $24,800 |
| Married Filing Separately | $12,550 | $12,400 |
| Head of Household | $18,800 | $18,650 |
3. L-T Capital Gain Tax Rates
| LTCG Tax Rate | TI (Single) | TI (MFJ) |
| 0% | $0–40,400 | $0–80,800 |
| 15% | $40,401–445,850 | $80,801–501,600 |
| 20% | Over $445,850 | Over $501,600 |
3.8% net investment tax: starts with AGI > $250,000 (MFJ) or $200,000 (Single)
* Biden’s proposal: AGI > $1M, LTCG taxed at ordinary income tax rates.
4. Child Credit
- Age 5 or younger: $3,600
- Age 6 – 17: $3,000
- 50% of credit: advance payment from July to December.
- The rest 50%: claim when file the tax return.
Credit phases out in 2 steps based on AGI:
1) Reduce from $3,600/$3,000 to $2,000: AGI > $150,000 MFJ/$75,000 Single.
2) Reduce the remaining $2,000: AGI > $400,000 MFJ/$200,000 Single.
5. Child & Dependent Care Credit
- Dependent < age 13.
- 2021 maximum percentage: 50% (previous: 35%).
- Qualified expense: up to $8,000 for one child (previous: $3,000);
up to $16,000 for multiple kids (previous: $6,000).
6. Recovery Rebate Credit
3rd stimulus check issued on 04/15/21:
$1,400 for eligible individual + $1,400 for each dependent.
7. Unemployment Compensation
2021: Fully taxable.
2020: $10,200 exempt from income tax.
8. Charitable Donation Deduction (when take standard deduction)
MFJ: up to $600.
Single: up to $300.
9. Education Benefits
No tuition and fees deduction for 2021.
10. Premium Tax Credit (Form 1095-A)
2021: the excess advance payments will have to be repaid.
Miscellaneous:
Standard mileage rates: $0.56/mile.
Traditional/Roth IRA contribution: same $6,000 + $1,000 for age 50 or older.
HSA contribution: $7,200 for family coverage + $1,000 for age 55 and older.
Business meals deduction: 100% for 2021 & 2022.
Gift tax exclusion: remains $15,000 per recipient.