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The percentage limit for charitable cash donations to public charities remains at 60% for 2o21. Home Mortgage Interest. You may only deduct interest on acquisition indebtedness-your mortgage used to buy, build or improve your home-up to $750,000, or $375,000 for married taxpayers filing separately.State and Local Taxes. Deductions for state and local sales, income, and property taxes remain in place and are limited to a combined total of $10,000, or $5,000 for married taxpayers filing separately.Medical and Dental Expenses. The “floor” for medical and dental expenses is 10% in 2021, which means you can only deduct those expenses which exceed 10% of your AGI.There are changes to itemized deductions found on Schedule A, including: The maximum zero rate amounts and maximum 15% rate amounts break down as follows: Exceptions also apply for art, collectibles and section 1250 gain (related to depreciation). Most taxpayers pay a maximum 15% rate, but a 20% tax rate applies if your taxable income exceeds the thresholds set for the 37% ordinary tax rate.
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Under the TCJA, your child must pay taxes on their unearned income, but if that amount is more than $1,100, but less than $11,000, you may be able to elect to include that income on your return rather than file a separate return for your child.Ĭapital Gains rates will not change for 2021, but the brackets for the rates will change. Unearned income is income from sources other than wages and salary, like dividends and interest.įor 2021, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,100 or (2) the sum of $350 and the individual’s earned income (not to exceed the regular standard deduction amount). The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24.