BP Administrations

11902 Rosecrans Ave Suite B Norwalk, CA. 90650 Tel (562) 888-1517 Fax (562) 991-5401

2021 will call for many tax changes. We have compiled the highlights of that bill.

If you still have questions, please contact us. Thank you.  

Highlights from the 2021 Tax Legislation: 

There are seven federal tax brackets for the 2021 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your bracket depends on your taxable income and filing status. These are the rates for taxes due in April 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

                    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         

 

 

  • Stimulus Check 

    • The year-end relief and spending package just signed into law include the second round of stimulus checks. This payment is up to $600 per taxpayer($1,200 for married joint filers) plus $600 per qualifying child under age 17. The second round of stimulus payments, like the first, isn’t taxable.                                                              

  • • Unemployment pay

    •  Among other changes in this area, the new law extends unemployment pay of $300 a week for many people from Dec. 26, 2020, to March 14, 2021, and it increases the maximum number of weeks of benefits to 50 from 39 in many cases. Unemployment compensation is taxable, although tax rates drop as income does. Recipients should expect to receive a Form 1099-G for 2020 and 2021 payments that will be reported to the IRS.

  • Standard Deductions    

    • In 2021 the standard deduction is $12,550 for single filers and married filers filing separately $25,500 for married filers filing jointly and $18,800 for heads of household.                                                                                                                                       ​​

  • Retirement-plan withdrawals
    • The new law has a provision allowing victims of officially declared disasters such as hurricanes and fires occurring from Dec. 28, 2019, to Jan. 27, 2021, to make withdrawals up to $100,000 of IRA and 401(k) assets. These withdrawals can then be included in taxable income or restored to such accounts over as long as three years. For people younger than 59 1/2 who take such payouts, the 10% penalty on early withdrawals doesn’t apply.  
  •  Earned Income and AGI Limits 

    • The maximum Earned Income Tax Credit in 2021 for single and joint filers is $543 if the filer has no children. The maximum credit is $3,618 for one child, $5,980 for two children, and $6,728 for three or more children.                                                                       

    • ​Phaseout ends (credit equals zero) amounts if filing Single, Head of Household, or Widowed:                                                          

      • Zero:​ $15,980

      • One: $42,158

      • Two: $47,915

      • Three: $51,464     ​​                                                                                                                                                          

    • ​Phaseout ends (credit equals zero) amounts if filing Married Filing Jointly                                                                                       

      • Zero:​$21,920

      • One:$48,108

      • Two:$53,865

      • Three:$57,414                  ​​                                                                                                                                                   

  • 2021 Child Tax Credit

    • The child tax credit totals at $2,000 per qualifying child and is not adjusted for inflation. However, the refundable portion of the Child Tax Credit is adjusted for inflation but will remain at $1,400 for 2021.

 

       

 

    (562) 888-1517          bpa.contact@gmail.com      11902 Rosecrans Ave. Unit B, Norwalk, CA 90650