For unmarried individuals, taxable income over….
$1 | 10% |
$9,950 | 12% |
$40,525 | 22% |
$86,375 | 24% |
$164,925 | 32% |
$209,425 | 35% |
$523,600 | 37% |
For married individuals filing joint returns, taxable income over…
$1 | 10% |
$19,900 | 12% |
$81,050 | 22% |
$172,750 | 24% |
$329,850 | 32% |
$418,850 | 35% |
$628,300 | 37% |
For heads of households, taxable income over…
$1 | 10% |
$14,200 | 12% |
$54,200 | 22% |
$86,350 | 24% |
$164,900 | 32% |
$209,400 | 35% |
$523,600 | 37% |
For unmarried individuals, taxable income over…
$1 | 0% |
$40,400 | 15% |
$200,000 | 18.8%* |
$445,850 | 23.8%* |
*Includes 3.8% net investment income tax
For married individuals filing joint returns, taxable income over…
$1 | 0% |
$80,000 | 15% |
$250,000 | 18.8%* |
$501,600 | 23.8%* |
*Includes 3.8% net investment income tax
$1 | 0% |
$54,100 | %15 |
$200,000 | 18.8%* |
$473,750 | 23.8%* |
*Includes 3.8% net investment income tax
Under age 50 | $6,000 |
Age 50 or over | $7,000 |
Traditional and Roth IRA contribution limits
Depending upon whether or not you and your spouse have a retirement plan at work, your IRA contribution may not be tax deductible and a Roth contribution might not be possible. See hereafter.
Covered by a plan at work…
Single or Head of Household… | ….and your Modified AGI is… | …then you can take… |
$66,000 or less | full deduction | |
in between | partial deduction | |
$76,000 or more | no deduction | |
Married filing jointly or qualifying widower… | …and your Modified AGI is… | …then you can take… |
$105,000 or less | partial deduction | |
in between | partial deduction | |
$125,000 or more | no deduction |
Follow this chart if you do have a retirement plan at work
Not covered by a plan at work…
Single, Head of Household or Qualifying Widower | Regardless of your income… | …you can take a full deduction |
Married with a spouse who does not have a plan at work | Regardless of your income… | …you can take a full deduction |
Married with a spouse who does have a plan at work … | …and your Modified AGI is… | …then you can take… |
$198,000 or less | full deduction | |
in between | partial deduction | |
$208,000 or more | no deduction |
Follow this chart if you don’t have a retirement plan at work
Roth IRA contributions, but not Roth conversions, are limited by income.
2020 income | Single | Married Filing Jointly |
May make a full Roth contribution | $125,000 or less | $198,000 or less |
Contribution gradually reduced | in between | in between |
Not eligible | $140,000 or more | $208,000 or more |
Maximum income for Roth contributions
SEP IRAs and Simple IRAs allow larger contributions than IRAs, but as discussed in the book, require rules to be followed.
SEP | $58,000 |
Simple | $13,500 |
The Simple IRA allows another $3,000 contribution if you are over age 50.
Employee | $19,500 |
Max including employer | $58,000 |
If you are over age 50, add the “catch up” amount | $6,500 |
Highly-compensated employee, income above | $130,000 |
Over age 50? Max employer and employee is $64,500.
Unmarried individuals | $11.7 million |
Married couples | $23.4 million |
These are also called FICA taxes, or payroll taxes.
Maximum earnings subject to Social Security Tax (OASDI): | $142,800 |
OASDI tax rate | 12.4% |
Max earnings subject to Medicare tax | no cap |
Medicare tax rate | 2.9% |
Self-employed people pay all of it: 15.3%. Or, for employees, they pay half, employers pay half.
Health savings accounts, health reimbursement accounts and flexible spending accounts; here are the contribution limits for 2021.
HSA annual contribution individual | $3,600 |
HSA annual contribution family | $7,200 |
HSA over age 55 catch-up | $1,000 |
QSEHRA annual contribution limit individual | $5,300 |
QSEHRA annual contribution limit family | $10,700 |
FSA contribution limit | $2,750 |
Dependent care FSA contribution limit | $5,000 |