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All the New Numbers You Need To Know for Planning Ahead on Taxes

Laura Woods
·3 min read
A woman sits at her dining room table with laptop and financial reports doing her monthly budget.
A woman sits at her dining room table with laptop and financial reports doing her monthly budget.

If you?re like many people, you?ve always known the importance of planning for the future, but the COVID-19 pandemic has further underlined this need. Your taxes aren?t due until April 15, 2021, but it?s never too early to start looking ahead.

The IRS has released 2021 tax numbers, so you know where you stand in key categories like tax rates and retirement plan contributions. This allows you to know exactly how much you?ll be taxed and ensure your retirement plan contributions don?t exceed the maximum amount. This is important because you don?t want to be hit with an unexpected tax bill or penalties that could?ve been easily avoided.

Take a look at the details you need to get your finances in order far ahead of tax day.

Last updated: Oct. 30, 2020

cheerful young woman relaxing on a chair while doing online shopping on a digital tablet at home.
cheerful young woman relaxing on a chair while doing online shopping on a digital tablet at home.

401(k) Plans

In 2021, the annual contribution limit for 401(k), 403(b) and most 457 plans will remain at $19,500. You?re able to update your per-paycheck contribution at any time, so keep an eye on the total amount of money you?ve saved for the year, so you can make adjustments if necessary.

Also worth noting, the 401(k) catch-up contribution limit for workers ages 50 and up will remain at $6,500. You can make this extra contribution even if you turn 50 on Dec. 31, 2021.

Cropped shot of a man sitting behind his computer in his home office.
Cropped shot of a man sitting behind his computer in his home office.

SEP IRAs and Solo 401(k) Plans

If you?re self-employed or own a small business, your SEP IRA or solo 401(k) contribution limits will realize a small bump in 2021. Based a percentage of your salary, you?re able to contribute $58,000 in 2021 ? up from $57,000 in 2020. Additionally, the compensation limit used as part of the savings calculation will rise to $290,000 in 2021 ? up from $285,000 in 2020.

Close up of a mature man paying bills.
Close up of a mature man paying bills.

Individual Retirement Accounts

The maximum contribution to your Individual Retirement Account ? including pretax, Roth or a combination ? will hold steady at $6,000. The catch-up contribution limit will also remain unchanged at $1,000.

It?s also worth noting that you can continue making 2021 contributions to your IRA until April 15, 2022. This gives you extra time to meet contribution limits if you fall behind during the year.

Read More: See What a $100K Salary Looks Like After Taxes in Your State

A woman scans through a W-9 forms as she does her taxes.
A woman scans through a W-9 forms as she does her taxes.

Tax Rates for Single Filers

Here?s a look at the tax rates you?ll be subject to as a single filer in 2021.

  • 37% for incomes over $523,600

  • 35% for incomes over $209,425

  • 32% for incomes over $164,925

  • 24% for incomes over $86,375

  • 22% for incomes over $40,525

  • 12% for incomes over $9,950

  • 10% for incomes of $9,950 or less

Couple sitting in their living room and checking their finances.
Couple sitting in their living room and checking their finances.

Tax Rates for Married Couples Filing Jointly

These are the tax rates you?ll face in 2021 as a married couple filing together.

  • 37% for incomes over $628,300

  • 35% for incomes over $418,850

  • 32% for incomes over $329,850

  • 24% for incomes over $172,750

  • 22% for incomes over $81,050

  • 12% for incomes over $19,900

  • 10% for incomes of $19,900 or less

Shot of a senior couple meeting up with a financial advisor.
Shot of a senior couple meeting up with a financial advisor.

Tax Rates for Married Couples Filing Separately

If you?re part of a married couple filing separately, you?ll be subject to these tax rates in 2021.

  • 37% for incomes over $523,600

  • 35% for incomes over $209,425

  • 32% for incomes over $164,925

  • 24% for incomes over $86,375

  • 22% for incomes over $40,525

  • 12% for incomes over $9,950

  • 10% for incomes of $9,950 or less

More From GOBankingRates

This article originally appeared on GOBankingRates.com: All the New Numbers You Need To Know for Planning Ahead on Taxes