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Key numbers to consider as you ponder crucial goals
Below you’ll find key numbers to consider as you ponder crucial goals like saving enough for retirement and college expenses, amounts to give to charities, and planning for changes in your estate. Keep in mind that, while averages are interesting, your individual situation may differ. Indeed, as you think about goals such as how to save for your children’s college costs and how to limit this year’s tax bill, please consult a Citi Personal Wealth Management Financial Advisor, who can coordinate financial planning strategies with your tax advisor.
This chart shows the average cost of living for raising children, paying for education, home ownership, retirement, medical expenses and nursing home costs in the U.S.
This chart indicates the percentages of U.S. families who have retirement accounts, own homes and vehicles, have debt with credit card balances, mortgages or other home-secured debt.
| 2021 | 2020 | |
|---|---|---|
| Earnings subject to Social Security payroll tax: | $142,800 | $137,700 |
|
Maximum federal income-tax rate of 37% and 20% maximum long-term capital-gains rate if income above: |
$628,300 if married filing jointly $523,600 if single |
$622,050 if married filing jointly $518,400 if single |
|
3.8% Medicare surtax applies to net investment income if total income above: |
$250,000 if married filing jointly $200,000 if single |
$250,000 if married filing jointly $200,000 if single |
| Standard deduction:1 |
$25,100 if married filing jointly $12,550 if single |
$24,800 if married filing jointly $12,400 if single |
| Personal exemption: | None | None |
| Gift tax exclusion: | $15,000 | $15,000 |
| Estate tax exclusion: | $11.7 million | $11.58 million |
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This table compares some key U.S. Federal Income Tax numbers between 2020 and 2021,
from payroll taxes and income tax rates to gift and estate tax exclusions.
1. No curtailing of itemized deductions if single or married.
| 2021 | 2020 | |
|---|---|---|
| Traditional and Roth IRA contribution limit.1 | $6,000 ($7,000 if age 50 or older) | $6,000 ($7,000 if age 50 or older) |
|
If covered by retirement plan at work, traditional IRA deduction phases out at: |
$105,000 to $125,000 if married filing jointly $66,000 to $76,000 if single |
$104,000 to $124,000 if married filing jointly $65,000 to $75,000 if single |
|
If spouse covered by retirement plan but you, aren't, your IRA deducation phases out at: |
$198,000 to $208,000 in joint income | $196,000 to $206,000 in joint income |
|
Eligibility to fund a Roth IRA phases out at these incomes: |
$198,000 to $208,000 if married filing jointly $125,000 to $140,000 if single |
$196,000 to $206,000 if married filing jointly $124,000 to $139,000 if single |
| 401(k) contribution limit: | $19,500 ($26,000 if age 50 or older) | $19,500 ($26,000 if age 50 or older) |
| SIMPLE IRA contribution limit: | $13,500 ($16,500 if age 50 or older) | $13,500 ($16,500 if age 50 or older) |
| SEP IRA contribution limit:2 | 25% of annual compensation, up to $58,000 | 25% of annual compensation, up to $57,000 |
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This table compares retirement related U.S. Federal Income Tax numbers between 2020 and 2021,
from IRA contribution limits to deduction phase out dollar amounts based upon various scenarios.
1 There are no income eligibility limits for contributions to a Traditional IRA. But if you or your spouse are covered by a workplace retirement plan, income limits apply for deducting annual contributions. With a Roth IRA, various income eligibility limits apply.
Please see the IRS website for current information: irs.gov/retirement-plans/traditional-and-roth-iras.
2 The employer makes contributions to a SEP IRA for employees. Contribution limits listed in the table are for the employer. Employee contributions are not permitted.
| 2021 | 2020 | |
|---|---|---|
| UGMA/UTMA account: | Up to $15,000 without worrying about gift tax | Up to $15,000 without worrying about gift tax |
| Kiddie tax on unearned income: | First $1,100 covered by child’s exemption | First $1,100 covered by child’s exemption |
| 529 college savings plans: | Can contribute $75,0001 and count it as your gift for next five years ($150,000 per married couple) | Can contribute $75,0001 and count it as your gift for next five years ($150,000 per married couple) |
|
Coverdell education savings account: Eligibility to contribute phases out at these incomes |
$2,000 maximum contribution $190,000 to $220,000 if married filing jointly $95,000 to $110,000 if single |
$2,000 maximum contribution $190,000 to $220,000 if married filing jointly $95,000 to $110,000 if single |
| Hope Scholarship/American Opportunity Credit: Phases out at these incomes: |
$2,500 maximum per student Phaseout begins at $160,000 if married filing jointly Phaseout begins at $80,000 if single |
$2,500 maximum per student Phaseout begins at $160,000 if married filing jointly Phaseout begins at $80,000 if single |
|
Lifetime Learning Credit: Phases out at these incomes: |
$2,000 maximum Phaseout begins at $119,000 if married filing jointly Phaseout begins at $59,000 if single |
$2,000 maximum Phaseout begins at $119,000 if married filing jointly Phaseout begins at $59,000 if single |
|
Education loan interest deduction: Phases out at these incomes: |
$2,000 maximum $140,000 to $170,000 if married filing jointly $70,000 to $85,000 if single |
$2,000 maximum $140,000 to $170,000 if married filing jointly $70,000 to $85,000 if single |
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This table compares college expense related U.S. Federal Income Tax numbers between 2020 and 2021,
from UGMA/UTMA accounts, 529 plans and Coverdell savings accounts to Lifetime Learning Credits and education loan interest deductions.
1 Five times gift-tax exclusion. Consult a tax advisor for important considerations regarding the five times gift-tax exclusion.
