IRS Posts the 2021 Inflation Adjustments
The Internal Revenue Service issued its annual inflation adjustments for tax year 2021, revising more than 60 tax provisions, including tax rate schedules, standard deduction amounts, and more. The following are of interest to investors.
- The excluded value of your estate; the value that is not subject to federal estate transfer tax at your death) will increase from $11.58 million ($23.16 million for married couples) to $11.70 million ($23.40 million for married couples)
- The amounts of allowable IRA and 401(k) contributions will remain unchanged.
- The standard deduction amount (for the person who does not itemize) will increase slightly to $25,100 for married couples.
- The top income tax bracket on individuals will remain 37% for married coupled with taxable earnings of $628,300 or more. (This could change under a different administration.)
- The top income tax bracket on trusts will begin at $13,051.
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