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Taxes 2021

Taxes 2021

This year’s tax season will be unusually busy for both taxpayers and the IRS, as many aspects of the coronavirus relief measures passed in 2020 will affect our tax returns,” says Garrett Watson, senior policy analyst at the Tax Foundation.

As always, the earlier you file your taxes, the sooner you could get a new stimulus check and speed up the delivery of any missing money you’re owed. “The IRS is encouraging taxpayers to file electronically to avoid delays in processing paper returns, as the agency is still digging out from a large paper correspondence backlog from last year,” Watson says.

Income tax brackets
For the tax year 2020, the standard deduction is $12,400 for single filers (an increase of $200) and $24,800 for married couples filing jointly (an increase of $400). For heads of households, the standard deduction is $18,650 (an increase of $300). These increases are inflation adjustments.

Charitable donation deductions
This year, you can deduct up to $300 in donations to qualifying charities — even if you don’t itemize. A temporary provision of the CARES Act designed to encourage giving, this deduction can’t be carried forward into subsequent years. You can search for eligible organizations with the Tax Exempt Organization Search tool on IRS.gov.

Student loans
Employers can now contribute up to $5,250 per year toward an employee’s student loan debt — and it’s tax-free for both employer and employee, as long as it’s for payments made from March 27, 2002, through Dec. 31, 2020.