Looking forward to the next year, many people are wondering if their taxes are going to go up. Fortunately, the tax brackets for 2021 have already been published, so we have the answer to this question.
For the vast majority of Americans, there will be no change or even a slight decrease in taxes if their financial situation remains the same. The 2021 tax brackets are as follows:
37% for incomes over $523,600 ($628,300 for married couples filing jointly);
35%, for incomes over $209,425 ($418,850 for married couples filing jointly);
32% for incomes over $164,925 ($329,850 for married couples filing jointly);
24% for incomes over $86,375 ($172,750 for married couples filing jointly);
22% for incomes over $40,525 ($81,050 for married couples filing jointly);
12% for incomes over $9,950 ($19,900 for married couples filing jointly).
10% for incomes of single individuals with incomes of $9,950 or less ($19,900 for married couples filing jointly).
If you compare these to the 2020 tax brackets, you’ll notice that the percents are identical, and the thresholds are a little higher. For example, the 10% bracket used to be up to $9,875 for someone filing single in 2020, and it will be up to $9,950 in 2021. This means that slightly more income will be taxed at the lower levels.
In addition to this, the standard deduction is increasing by $300 for married filing jointly, and $150 for single, married filing separately and head of household.
For more people, taxes will only increase if you have an increase in income. If you need a review of your projected taxes to make additional estimated payments, Clergy Financial Resources has you covered. Our estimated payment review can calculate how much tax we think you will owe for 2020, so you can make any necessary estimated payments. If you want a review of your estimated payments, visit our website at https://www.clergyfinancial.com/services/clergy-tax-preparation/estimated-payment-support-clergy/
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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