For individuals, taxable income over…
$1 | 10% |
$10,275 | 12% |
$41,775 | 22% |
$89,075 | 24% |
$170,050 | 32% |
$215,950 | 35% |
$539,900 | 37% |
For married couples filing joint returns, taxable income over…
$1 | 10% |
$20,550 | 12% |
$83,550 | 22% |
$178,150 | 24% |
$340,100 | 32% |
$431,900 | 35% |
$647,850 | 37% |
For heads of households, taxable income over…
$1 | 10% |
$14,650 | 12% |
$55,900 | 22% |
$89,050 | 24% |
$170,000 | 32% |
$215,950 | 35% |
$539,900 | 37% |
For unmarried individuals, taxable income over…
$1 | 0% |
$41,675 | 15% |
$200,000 | 18.8%* |
$459,750 | 23.8%* |
*Includes 3.8% net investment income tax
For married individuals filing joint returns, taxable income over…
$1 | 0% |
$83,350 | 15% |
$250,000 | 18.8%* |
$517,200 | 23.8%* |
*Includes 3.8% net investment income tax
For heads of household, taxable income over…
$1 | 0% |
$55,800 | %15 |
$200,000 | 18.8%* |
$488,500 | 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… |
$68,000 or less | full deduction | |
in between | partial deduction | |
$78,000 or more | no deduction | |
Married filing jointly or qualifying widower… | …and your Modified AGI is… | …then you can take… |
$109,000 or less | partial deduction | |
in between | partial deduction | |
$129,000 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… |
$204,000 or less | full deduction | |
in between | partial deduction | |
$214,000 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 | $129,000 or less | $204,000 or less |
Contribution gradually reduced | in between | in between |
Not eligible | $144,000 or more | $214,000 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 | $61,000 |
Simple | $14,000 |
The Simple IRA allows another $3,000 contribution if you are over age 50.
Employee | $20,500 |
Max including employer | $61,000 |
If you are over age 50, add the “catch up” amount | $6,500 |
Highly-compensated employee, income above | $135,000 |
Over age 50? Max employer and employee is $64,500.
Unmarried individuals | $12.06 million |
Married couples | $24.12 million |
These limits expire in 2025.
These are also called FICA taxes, or payroll taxes.
Maximum earnings subject to Social Security Tax (OASDI): | $147,000 |
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.
2020 modified adjusted gross income above….
Single | MFJ | MF Separate | 2022 Part B Premium | Part D surtax |
$1 | $1 | $1 | $170.10 | $0 |
$91,000 | $182,000 | $238.10 | $12.40 | |
$114,000 | $228,000 | $340.20 | $32.10 | |
$142,000 | $284,000 | $442.30 | $51.70 | |
$170,000 | $340,000 | $544.30 | $71.30 | |
$499,999 | $749,999 | $91,000 | $578.30 | $77.90 |
Income earned two years ago forces a monthly Medicare surtax for two years.
Health savings accounts, health reimbursement accounts and flexible spending accounts; here are the contribution limits for 2021.
HSA annual contribution individual | $3,650 |
HSA annual contribution family | $7,300 |
HSA over age 55 catch-up | $1,000 |
QSEHRA annual contribution limit individual | $5,450 |
QSEHRA annual contribution limit family | $11,050 |
FSA contribution limit | $2,850 |
Dependent care FSA contribution limit | $5,000 |