2021 Standard Deduction and Personal Exemption
​The standard deduction for single filers will increase by $150 and by $300 for married couples filing jointly (Table 2).
The personal exemption for 2021 remains eliminated.

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two.

The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, this exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent.
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The AMT exemption amount for 2021 is $73,600 for singles and $114,600 for married couples filing jointly (Table 3).

In 2021, the 28 percent AMT rate applies to excess AMTI of $199,900 for all taxpayers ($99,950 for married couples filing separate returns).
AMT exemptions phase out at 25 cents per dollar earned once taxpayer AMTI hits a certain threshold. In 2021, the exemption will start phasing out at $523,600 in AMTI for single filers and $1,047,200 for married taxpayers filing jointly (Table 4).

​The maximum Earned Income Tax Credit in 2021 for single and joint filers is $543, if the filer has no children (Table 5). The maximum credit is $3,618 for one child, $5,980 for two children, and $6,728 for three or more children. All these are relatively small increases from 2020.

​​2021 Child Tax Credit

2021 Qualified Business Income Deduction (Sec. 199A)
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The Tax Cuts and Jobs Act includes a 20 percent deduction for pass-through businesses against up to $164,900 of qualified business income for unmarried taxpayers and $329,800 for married taxpayers (Table 7).

2021 Annual Exclusion for Gifts
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In 2021, the first $15,000 of gifts to any person are excluded from tax. The exclusion is increased to $159,000 for gifts to spouses who are not citizens of the United States.

​HSA's are still so underutilized as a tax tool it’s a bit unreal especially considering its 2019 & HSA's have been around for years.

While we’ve been delayed a bit longer than planned with the clients only section to our website, we are now just a short time away.  The emphasis in the end is to touch on matters like this in greater and greater detail, and move BEYOND the OBVIOUS, and instead supercharge wealth creation for ALL our clients. 
 
Here are a few of my favorite perks of HSA's.
 
1) Maximizing your contribution(s) when able.  As some who's been through hell and back with health scares in the past, and the money crunch that can come after (even with insurance), HSA's that are well planned and funded long before an event arises can save a ton of heart ache and years of hard work.
 
2) IT’S TAX FREE MONEY - Literally!!   When you put money into an HSA it's tax deductible up to the limits, it then grows tax free, and as long as distributions (and growth) are used for qualified medical the entire transactions costs you nothing in tax.  How many tax breaks save you money to start, and charge no tax on the back end (even on the growth)?  Not many believe me.
 
3) If you're Married and Your Spouse is the Beneficiary the funds transfer TAX FREE, better yet the spouse isn't even required to carry an HSA-eligible health plan.  There are other rules if the beneficiary is not your spouse which can be very tax beneficial in their own right if done properly. 
 
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