2021 TAX UPDATE

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Season's greeting to all clients of Le's Office and friend! It is time to begin preparing for the 2022 income tax filing season. Start by collecting and keeping track of your income and deduction documentation. 


KEY 2021 EXEMPTION AND DEDUCTIONS :

1.NO  PERSONAL EXEMPTIONS :
The personal exemption for each qualifying dependent  for 2020 :

Exemption : 2021 : $ 0

2. STANDARD DEDUCTIONS : for tax year 2021


Married Filing Joint $25,100

Single $12,550

Head of Household $18,800

Married Filing Sep $12,550

Elderly / Blind : married  + $1300

Elderly / Blind : unmarried + $1650

 

3. STANDARD MILEAGE RATES :
The standard mileage rates for 2021 are :
                             

a. Business :             $.56 / mile                                 
b. Charitable work : $ .14 / mile                                  
c. Medical/Moving : $ .16 / mile     

4. HEALTH INSURANCE PENALTY in 202 :  No penalty in tax year 2021

5. Self Employment :  Can deduct health insurance premium in tax year 2021                             



2021 TAX RATES :

Income Tax Brackets :

1. TAX RATE 10% : Single(S) , Married Joint(MJ), Head of Household (H)

$1 - $9225(S) * $1 - $18150(MJ) * $1 - $ 12950(H)

2. TAX RATE 15% :

$9076 - $36950(S) * $18151 - $73800(MJ) * $12951 - $49400 (H)

3. TAX RATE 25% :

$36901 - $89350(S) * $73801 - $148850(MJ) * $ 49401 - $ 127550(H)


 TAX CREDIT 2021 - DO YOU QUALIFY ?

Each year taxpayers claim a variety of tax credits for which they are eligible. Tax credits are valuable because they are a dollar -for-dollar reduction of taxes owned.

1. The Earned Income Tax Credit : is a refundable credit for low -income working individuals and families.

Maximum Credit : $538(none children ), $3584 (One Child), $5920(Two children), $6660 (Three or more Children).  You can claim EITC for Max 3 Children. 

*** Investment income Limit for EIC : $3650

2. The Child and Dependent Care Credit : is for expenses paid for the care of children under age 13, or for a disable spouse or dependent.

3. The Child Tax Credit : is for people who have a qualifying child.  The maximum amount of the credit is $2000 for each qualifying in 2021.

4. The Adoption Credit : is  a tax credit of up to $14300 in 2021 for qualifying expenses paid to adopt a child.

5. The Credit for the Elderly or the Disablle : is a credit available to individuals who are either age 65 or older or under age 65 and retired on permanent and total disability.


NEW 2021 TAX LAWS

- TAX SAVING FOR 2021

-Energy Tax Credits :  

.

- First-Time Homebuyer Credit :   none

- Education Credit :  You may qualify for maximum annual credit of $2500 per student.

Earn Income Tax Credit :  you may claim up to 3 children ( Max $6660).   Taxpayer must be older than the Child in order to claim EITC.


MORE 2021 TAX UPDATE . If you want more 2021 tax update, please link the line below, you will be automatic link direct to IRS web site :I R S Web SiteIf you need more information or have any question, please call Tom at 585-330-9263 or email us : customerservice@le-office.com