Latest Newsletter Edition

2021 Adjustments to Tax Brackets and Deductions

The IRS recently released a list of federal income tax adjustments for 2021. The most important changes include higher standard deductions and higher income limits for common tax rates.

Standard Deduction Increases

The standard deduction for individual taxpayers will increase by $150 in 2021, up to $12,550 for single filers and $18,800 for those filing as a Head of Household. Couples filing jointly will get a standard deduction of $25,100, a $300 increase from 2020. As in 2018-2020, there will be no limit on itemized deductions in 2021.

New Income Limits For Tax Brackets

The income brackets for the seven federal tax rates will all shift upward in 2021. For example, the 10% tax rate will apply to individual incomes up to $9,950, up from $9,875 in 2020. The upper limit for the 12% tax rate for individuals will increase to $40,525, while the limit for the 22% rate will go up to $86,375.

Similar income limit increases will apply for the 24%, 32%, 35%, and 37% marginal tax rates. In every case, the income limit for joint filers will be twice the limit for individuals (for example, $19,900 for the 10% rate, $81,050 for the 12% rate, and $172,750 for the 22% rate). In addition, the Alternative Minimum Tax (AMT) exemption amount will increase to $73,600 for individuals and $114,600 for joint filers.

Check Your Withholding

If you pay federal tax primarily through paycheck withholding, your withholding amount may change after January 1, 2021 to reflect these IRS adjustments. To make sure you are on track with your tax payments in the new year, you can enter your pay stub information into the IRS Withholding Estimator Tool (link below).

IRS Withholding Estimator Tool:


Greber Tax Advisors does not warrant the accuracy of the information contained herein, nor is it responsible for any errors or omissions and assumes no liability for its use.  The information provided is not intended to be construed as a substitute for obtaining proper expert advice from recognized professionals in their related fields.  Links to third-party websites are provided as a courtesy. The materials on third-party sites are provided “as is” and without warranties of any kind either express or implied.  Greber Tax Advisors exercises no control over the views, accuracy, copyright or trademark compliance or the legality of the material contained on third party sites and does not sponsor, endorse or approve the information, content, products, materials, opinions or services contained on such external sites.  The visitor proceeds to these external sites at their own risk.  Greber Tax Advisors disclaims any and all liability from damages which may result from the accessing this website, or that of a third party site which is linked to the Greber Tax Advisors website, or from reliance upon any and all information contained therein.