News you can use – updates for the 2021 tax year

The Child Tax Credit (CTC)

The American Rescue Plan signed into law by President Joe Biden is giving $300 per child under 6, and $250 per child between 6 and 17 each month through the end of the year. The child tax credit advance program expanded the $2,000 annual tax credit, making it a total $3,600.

There are a couple of criteria to claim the 2021 CTC, give us a call for more information.

Social Security COLA Increase (Cross Reference: www.ssa.gov)

The Social Security Administration has announced that Social Security and Supplemental Security Income (SSI) benefits will increase by 5.9% for 2022. 

Maximum earnings subject to 

Social Security Tax: 2022 = $147,000.00 2021 = $142,800.00

Medicare Tax:   2022 = No Limit 2021 = No Limit 

Changes to retirement plan distributions

Taxpayers should be aware that provisions in the CARES Act allowed individuals impacted by COVID-19 to take out up to $100,000 of retirement funds without incurring the customary 10% early withdrawal penalty. Further, the legislation also loosened requirements for retirees to take required minimum distributions (RMDs) from their retirement plans.

The current U.S. standard deduction amounts are:

• $12,550      for single taxpayers
• $12,550      for married taxpayers who file their taxes separately
• $18,800      for heads of households
• $25,100      for married taxpayers who file jointly
• $25,100      for qualifying widows or widowers

2020-2021 Tax Brackets

Tax Rate: 10%; 12%; 22%; 24%; 32%;35%; 37%