Tax season is just around the corner and there are a lot of changes for your 2021 tax return with potentially more to come. Here’s a list of 10 that you should know about:

  1. Tax rates remain the same, but the brackets have been indexed up for inflation.
  2. The Roth IRA income limitation has increased with the phase out range for joint filers now $198,000 – $208,000
  3. The business mileage reimbursement rate decrease from $.575 to $.56
  4. Charitable contributions of up to $600 can be claimed by jointly filers when taking the standard deduction (up from $300 last year). These must be cash or cash equivalents (not gifts in kind, appreciated securities, etc.)
  5. Expanded child tax credit increased to $3000 for children age 6-17 years and $3600 for children age 0-5 years. The advanced child tax credit payments that you may have received are an advance against that and will be reconciled on your 2021 return. If you received more than you should, you will owe it back. It may feel that you are getting a smaller refund or owing more than you anticipated, but remember that they already sent you some of the credit during the year.
  6. RMDs are back for retirees after not being required in 2020. These must be taken by 12/31/2021 and there are stiff penalties for not doing so.
  7. The child and dependent care credit has increased and is now fully refundable.
  8. The Recovery Rebate Credit is back and can be claimed if you did not receive the $1400 stimulus payments this year.
  9. The standard deduction has increase to $25,100 for joint filers and $12,550 for single filers.
  10. The deduction for business meals has been increased from 50% to 100%

There are many other changes, but these are the major ones. Congress can make changes up to the end of the year (and in to next year as we saw in 2021) so stay tuned for more changes.

2021 income tax IRS taxes