2021 is moving along nicely and while not much has changed from 2020, there are a slew of tax law changes that may affect you. Starting with the CARES Act and tucked inside the 5,593-pages of year-end legislation passed are some key tax changes you should know about. The change that will affect the most is the higher standard deduction. The sing filer deduction is up $200 from $12,200 to 12,400. Married, filing jointly up $400 from $24,400 to $24,800 and head of household from $1,350 to $18,650. This change means your taxable income will be reduced by a little bit more. Also adjusted for inflation are the tax brackets, which remain the same, but depending on your income, your bracket may change with your income and tax bracket adjustments. Your workplace flexible spending account (FSA) might no longer be strictly "use it or lose it"—the latest relief bill allows your employer to roll over funds into 2021 and 2022, if they choose to offer the option. Also, the annual limit on deductible contributions to a Health Savings Account (HSA) in 2020 goes up $50 for individuals and $100 for families next year, bringing them to $3,550 and $7,100, respectively. Back in April, the CARES Act allowed charitable donations to be exercised even without itemizing, of $150 for single filing and $300 for joint filers. That now has been increased to $300 for singles and $600 for joint. Just remember, this is for monetary contributions to specific charities as approved by the IRS. The provision that allows employers to voluntarily pay up to $5,250 of an employee's college loan during 2020 has been extended for five years. Both employers and employees are able to avoid federal payroll taxes on the money.
Finally, you can now get a 100% deduction for business-meal and beverage expenses in 2021 and 2022, a 50% bump from 2020. It applies to delivery and carryout meals, as well as those in restaurants.
SOURCE: Lifehacker
Tax Changes For 2021
New year, new tax laws.
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By 98.5 KTKJan 11, 2021
