Tax season coming soon

The following information is subtracted from > https://www.cpapracticeadvisor.com/tax-compliance/news/21154296/projected-2021-tax-rates The tax season is aroud the corner! Bloomberg Tax & Accounting has released its 2021 Projected U.S. Tax Rates report. Based on changes in the chained Consumer Price Index (chained CPI) released today by the U.S. Bureau of Labor Statistics, Bloomberg Tax & Accounting's annual report is detailed and comprehensive projection of inflation-adjusted amounts in the tax code.

Each year, these projections facilitate tax planning by providing early notice of the amount of tax savings that taxpayers will realize as a result of increases in deduction limits, upward adjustments to tax bracket thresholds, and increases in many other key thresholds. The full report is available at http://onb-tax.com/IXfw50BoacG. From 2020 to 2021, most inflation-adjusted amounts in the tax code, including the threshold dollar amounts for tax rate brackets, are projected to rise by about 1%. Tax code amounts that are adjusted based on the medical component of the chained CPI, on the other hand, are projected to rise about 4% to 5%.

"As expected, we are projecting small increases for most inflation-adjusted amounts this year. These small increases are due to the use of the chained CPI to measure cost of living adjustments and the slow rise in inflation overall," said Steven Grodnitzky, practice lead for U.S. Income Tax and IRS Procedure, Bloomberg Tax & Accounting. "Taxpayers and tax planners can get an early start on 2021 tax year strategies by using these projections before the release of figures by the IRS."

Individual Income Tax Rate Brackets

Bloomberg Tax & Accounting has projected 2021 income ranges for each tax rate bracket. Income ranges for the tax brackets for married taxpayers filing jointly and for single taxpayers are shown below. Rate brackets for other filing statuses are included in the full report.

Married Filing Jointly and Surviving Spouses

Projected 2021 Tax Rate Bracket Income Ranges10% - $0 to $19,90012% - $19,901 to $81,05022% - $81,051 to $172,75024% - $172,751 to $329,85032% - $329,851 to $418,85035% - $418,851 to $628,30037% - $628,301 or more

Unmarried Individuals (other than Surviving Spouses and Heads of Households)

Projected 2021 Tax Rate Bracket Income Ranges10% - $0 to $9,95012% - $9,951 to $40,52522% - $40,526 to $86,37524% - $86,376 to $164,92532% - $164,926 to $209,42535% - $209,426 to $523,60037% - $523,601 or more

Standard Deduction

Bloomberg Tax & Accounting has projected the following standard deduction amounts for 2021:

Filing StatusProjected 2020 Standard DeductionMarried Filing Jointly/Surviving Spouses$25,100Heads of Household$18,800All Other Taxpayers$12,550

Alternative Minimum Tax (AMT)

Projected 2021 AMT exemption amounts are shown below.

Filing StatusProjected 2020 AMT Exemption AmountMarried Filing Jointly/Surviving Spouses$114,600Unmarried Individuals (other than Surviving Spouses)$73,600Married Individuals Filing Separate Returns$57,300Estates and Trusts$25,700