At A Glance – It’s a great time to check your accounts for Year-End Investment and Tax Planning. Here are some important numbers for 2021.
This article contains several tables with important numbers for 2021. Not all numbers will apply to you. Here are a few abbreviations used in these tables:
MFJ = Married Filing Joint
MAGI = Modified Adjusted Gross Income
IRMAA = Income-Related Monthly Adjusted Amount
Traditional IRA And Roth IRA
| Traditional and Roth Contributions | |
| Total Contribution limit | $6,000 |
| Catch Up (Age 50+) | $1,000 |
| Roth IRA Eligibility | |
| Single MAGI Phaseout | $125,000 – $140,000 |
| MFJ MAGI Phaseout | $198,000 – $208,000 |
Retirement Plans
| 401k, 403b, 457 | |
| Contribution LImit | $19,500 |
| Catch Up (Age 50+) | $6,500 |
Health Savings Accounts
| Contribution Limit | |
| Individual | $3,600 |
| Family | $7,200 |
| Catch Up (Age 55+) | $1,000 |
Gift Tax
| Lifetime Exemption | Tax Rate | Annual Exclusion |
| $11,700,000 | 40% | $15,000 |
Medicare Premium
| Part B | $148.50 | ||
| Part A | Less Than 30 Credits = $471 | 30-39 Credits = $259 | 40+ Credits = $0 |
Medicare IRMAA Surcharge
| Your 2019 MAGI Income was: | IRMAA Surcharge | ||
| MFJ | Single | Part B | Part D |
| $176,000 or less | $88,000 or less | —– | —– |
| $176,000 – $222,000 | $88,000 – $111,000 | $59.40 | $12.30 |
| $222,000 – $276,000 | $111,000 – $138,000 | $148.50 | $31.80 |
| $276,000 – $330,000 | $138,000 – $165,000 | $237.60 | $51.20 |
| $330,000 – $750,000 | $165,000 – $500,000 | $326.70 | $70.70 |
| $750,000 or more | $500,000 or more | $356.40 | $77.10 |
Tax Rates
| Tax Rate | MFJ | Single |
| 10% | $0-$19,900 | $0-$9,950 |
| 12% | $19,901-$81,050 | $9,951-$40,525 |
| 22% | $81,051-$172,750 | $40,526-$86,375 |
| 24% | $172,751-$329,850 | $86,376-$164,925 |
| 32% | $329,851-$418,850 | $164,926-$209,425 |
| 35% | $418,851-$628,300 | $209,426-$523,600 |
| 37% | Over $628,300 | Over $523,600 |
Standard Deduction
| Filing Status | Add’l (Age 65+ or Blind) | ||
| MFJ | $25,100 | Married (each eligible spouse) | $1,350 |
| Single | $12,550 | Single, HOH | $1,700 |
Long Term Capital Gains Rates
| Filing Status | 0%Rate | 15%Rate | 20%Rate |
| MFJ | $80,000 or less | $80,800 – $501,600 | $501,600 or more |
| Single | $40,400 or less | $40,400 – $445,850 | $445,85 |
Social Security Full Retirement Age
| Birth Year | Full Retirement Age |
| 1943-1954 | 66 |
| 1955 | 66 + 2 mo |
| 1956 | 66 + 4 mo |
| 1957 | 66 + 6 mo |
| 1958 | 66 + 8 mo |
| 1959 | 66 + 10 mo |
| 1960+ | 67 |
Key Takeaway – The end of the year is a great time to make sure you have maxed out retirement accounts and HSA’s. Also, evaluate your numbers to make the final decisions on when to execute a taxable event such as a ROTH ladder or gift.
Assignment – Check all your retirement accounts such as 401k’s, HSA’s, and IRA’s to make sure they have been maxed out if possible. Check your expected tax bracket and standard deduction for any income that needs to be brought forward into the 2021 tax year or possibly deferred to another year. If you are reaching 65 years old, look at your income level to see if the IRMAA surcharges will apply to you and check if you can appeal them.
