1st November 2020   |   Tax

The standard deduction for 2021 will be $25,100, an increase of $300, for married couples filing joint returns; $12,550, an increase of $150, for single taxpayers’ individual returns and married individuals filing separately; and $18,800, an increase of $150, for heads of households. 

The additional standard deduction amount for an individual who is aged or blind will be $1,350; however, if the individual is unmarried and not a surviving spouse, the amount will be $1,700.

The standard deduction for an individual who can be claimed as a dependent on another taxpayer’s return cannot exceed the greater of (1) $1,100, or (2) $350 plus the individual’s earned income (but not more than the regular standard deduction, $12,550). 

Same Tax Rates but Higher Brackets

The top rate of 37% will apply to taxable income over $628,300 for married couples’ joint returns; over $523,600 for single taxpayers’ individual returns and heads of household returns; and over $314,150 for married individuals filing separately. The tax rates and brackets for 2021 are provided in the chart below:

2021 Tax Brackets

Rate

Married Joint Return

Single Individual

Head of Household

Married Separate Return

10%

$19,900 or less

$9950 0r less

$14,200 or less

$9950 or less

12%

Over $19,900

Over $9,950

Over $14,200

Over $9,950

22%

Over $81,050

Over $$40,525

Over $54,200

Over $40,525

24%

Over $172,750

Over $86,375

Over $86,350

Over $86,375

32%

Over $329,850

Over $164,925

Over $164,900

Over $164,925

35%

Over $418,850

Over $209,425

Over $209,400

Over $209,425

37%

Over628,300

Over $523,600

Over $523,600

Over $314, 150

 

To find out more contact us at info@Ax3.com.au

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