![]() ![]() In that case, you can deduct interest up to $1 million of mortgage debt plus an additional $100,000 of equity debt. If your mortgage was created before the Tax Cuts and Jobs Act passed in 2017, it’s grandfathered in. Typically, any interest that exceeds these amounts isn’t tax-deductible. If your status is married filing separately, it’s limited to debt up to $375,000. ![]() In 2020, this deduction is limited to mortgage debt – or home acquisition debt – up to $750,000. If you take out a mortgage to buy, build, or renovate to improve your home, you can deduct the interest you pay on the mortgage. If you live in a high-tax state like California or Hawaii, this deduction might not be as helpful as in past years. In that case, you’re limited to a $5,000 deduction. In both 20, you can deduct up to $10,000 in state and local sales, income, and property taxes unless your filing status is married filing separately. Once your medical and dental expenses exceed 7.5% of your AGI, you can deduct them on your 20 tax returns, if you choose to itemize. The remaining amount between $40,526 and $55,000 is taxed at 22%.īelow are the tax rates for 2021 and 2020. If you’re a single filer and your 2021 taxable income is $55,000, $9,950 is taxed at 10%. The federal tax brackets are progressive. ![]() You have four filing statuses to choose from: single, married filing jointly, married filing separately, or head of household. Each rate applies to its own tax bracket and is based on your filing status. Here’s a breakdown of the key tax elements affecting your 20 tax returns. Remember, you file your 2020 tax return in 2021 and your 2021 tax return in 2022.įederal tax brackets & rates for 2020 & 2021Īt the federal level, there are seven tax brackets that range from 10% to 37%. Each year, new tax rates are created, income thresholds are updated, and credits and deductions are renewed. Pay attention to these numbers early in the year to outline your tax strategy and make the most of any and all possible tax benefits. ![]()
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