Here's a quick review of some of the tax changes you'll see from 2020 to 2021 as a result of inflation adjustments and new tax laws.
| Provision | 2021 | 2020 | +/- |
| Business equipment Sec. 179 expensing deduction | $1,050,000 | $1,040,000 | +$10,000 |
| Total purchase limit for full Sec. 179 expensing deduction | $2,620,000 | $2,590,000 | +$30,000 |
| Standard mileage rate: business | 56¢ per mile | 57.5¢ per mile | -1.5¢ |
| Standard mileage rate: medical/moving | 16¢ per mile | 17¢ per mile | -1.0¢ |
| Mileage rate: charitable activity | 14¢ per mile | 14¢ per mile | nc |
| Maximum wages subject to social security tax | $142,800 | $137,700 | +$5,100 |
| Social security earnings limit | |||
| - Under full retirement age | $18,960 | $18,240 | +$720 |
| - Full retirement age | No limit | No limit | nc |
| Top estate tax rate | 40% | 40% | nc |
| Estate tax exemption | $11,700,000 | $11,580,000 | +$120,000 |
| Annual gift tax exclusion (per donee) | $15,000 | $15,000 | nc |
| Alternative minimum tax exemption | |||
| - Single | $73,600 | $72,900 | +$700 |
| - Married, joint | $114,600 | $113,400 | +$1,200 |
| - Married, separate | $57,300 | $56,700 | +$600 |
| Maximum retirement plan contributions | |||
| - IRA for those under age 50 | $6,000 | $6,000 | nc |
| - IRA for those 50 and over | $7,000 | $7,000 | nc |
| - SIMPLE plan for those under age 50 | $13,500 | $13,500 | nc |
| - SIMPLE plan for those 50 and over | $16,500 | $16,500 | nc |
| - 401(k) plan for those under age 50 | $19,500 | $19,500 | nc |
| - 401(k) plan for those 50 and over | $26,000 | $26,000 | nc |
| HSA contribution limits | |||
| - Self only | $3,600 | $3,550 | +$50 |
| - Family | $7,200 | $7,100 | +$100 |
| - Additional for 55 & older | $1,000 | $1,000 | nc |
| "Kiddie tax" threshold | $2,200 | $2,200 | nc |
| "Nanny tax" threshold | $2,200 | $2,200 | nc |
| Education savings account contribution (Coverdell) | $2,000 | $2,000 | nc |
| American opportunity (Hope) credit limit | $2,500 | $2,500 | nc |
| Education loan interest deduction | $2,500 | $2,500 | nc |
| Personal exemption (suspended through 2025) | Suspended | Suspended | na |
| FICA & self-employment tax | |||
| Taxable wages for Social Security/Medicare | Up to $142,800 | Up to $137,700 | +$5,100 |
| Social Security/Medicare tax rate | |||
| - Employees | 7.65% | 7.65% | nc |
| - Employers | 7.65% | 7.65% | nc |
| - Self-employed | 15.3% | 15.3% | nc |
| Standard deduction | |||
| - Single | $12,550 | $12,400 | +$150 |
| - Joint returns & surviving spouses | $25,100 | $24,800 | +$300 |
| - Married filing separately | $12,550 | $12,400 | +$150 |
| - Head of household | $18,800 | $18,650 | +$150 |
| - Additional for elderly or blind (married) | $1,350 | $1,300 | +$50 |
| - Additional for elderly or blind (single) | $1,700 | $1,650 | +$50 |
