In this article, we discuss important tax dates, the tax rates and related numbers that you may need to prepare your 2020 income tax return. These are the applicable numbers for the tax year 2020 – (income from January 1, 2020-December 2020). The information is generic for all and applies to all foreigners on work visa like H1B, L1, etc…
Important tax dates for year 2021 to file FY 2021 Taxes
May 17, 2021 is the Tax filing deadline from IRS for filing taxes in 2021. Below are various important dates from tax perspective to plan your activities.
|Date||Tax Related Activity|
|Tax Day* Last day for filing federal income tax returns and extension requests. |
Also, it is a due date for filing extensions for 200 Federal Income Tax Returns.
Due dates for filing State Income Tax though it can vary by state. Also, if you worked for multiple employers in different states during the tax year, then you need to file state income tax returns in all those states in addition to the federal return in form 1040/1040NR as the case may be, depending on your residential status.
|May 17, 2021||U.S. citizens or resident aliens living abroad must file tax returns and pay any taxes due by this date (or file for a four-month extension)|
|Apr 15, 2021||FBAR (Foreign Bank Account Report) forms due for taxpayers who have over $10,000 in total in foreign bank accounts at any time in the prior year. It is just for reporting purposes only. Remember, there is no extension to file this form.|
|October 15, 2021||Last day to e-file a 2020 Federal Income Tax Return for Tax Extension. Note: you still need to file for an extension request.|
2021 Income Tax Brackets or Tax Slabs
The amount of tax you owe depends on your income level and filing status like single or married.
US Tax Brackets for Single – 2020
|10%||$0 to $9,875||10% of taxable income|
|12%||$9,876 to $40,125||$987.50 plus 12% of the amount over $9,875|
|22%||$40,126 to $85,525||$4,617.50 plus 22% of the amount over $40,125|
|24%||$85,526 to $163,300||$14,605.50 plus 24% of the amount over $85,525|
|32%||$163,301 to $207,350||$33,271.50 plus 32% of the amount over $163,300|
|35%||$207,351 to $518,400||$47,367.50 plus 35% of the amount over $207,350|
|37%||$518,401 or more||$156,235 plus 37% of the amount over $518,400|
US Tax Brackets for Married Filing Jointly or Qualifying Widow(er)– 2020
|$0 to $19,750||10% of taxable income|
|$19,751 to $80,250||$1,975 plus 12% of the amount over $19,750|
|$80,251 to $171,050||$9,235 plus 22% of the amount over $80,250|
|$171,051 to $326,600||$29,211 plus 24% of the amount over $171,050|
|$326,601 to $414,700||$66,543 plus 32% of the amount over $326,600|
|$414,701 to $622,050||$94,735 plus 35% of the amount over $414,700|
|$622,051 or more||$167,307.50 plus 37% of the amount over $622,050|
US Tax Brackets for Married Filing Separately – 2021
|$0 to $9,875||10% of taxable income|
|$9,876 to $40,125||$987.50 plus 12% of the amount over $9,875|
|$40,126 to $85,525||$4,617.50 plus 22% of the amount over $40,125|
|$85,526 to $163,300||$14,605.50 plus 24% of the amount over $85,525|
|$163,301 to $207,350||$33,271.50 plus 32% of the amount over $163,300|
|$207,351 to $311,025||$47,367.50 plus 35% of the amount over $207,350|
|$311,026 or more||$83,653.75 plus 37% of the amount over $311,025|
US Tax Brackets for Head of Household – 2017
|$0 to $14,100||10% of taxable income|
|$14,101 to $53,700||$1,410 plus 12% of the amount over $14,100|
|$53,701 to $85,500||$6,162 plus 22% of the amount over $53,700|
|$85,501 to $163,300||$13,158 plus 24% of the amount over $85,500|
|$163,301 to $207,350||$31,830 plus 32% of the amount over $163,300|
|$207,351 to $518,400||$45,926 plus 35% of the amount over $207,350|
|$518,401 or more||$154,793.50 plus 37% of the amount over $518,400|
Deductions and Exemptions for Tax Filing in 2021 for year 2020
- The personal exemption for tax year 2021 remains at 0, as it was for 2020; this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
- The spouse of a person on H1B visa can be treated as resident for tax purposes by filing a declaration along with the tax returns even though he/she is not living United States. The advantage of doing so is that you are able to claim additional spousal exemption on the tax returns which directly could result in additional tax savings.
- For 2021, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
Standard Tax Deductions for 2020 to file in 2021
|Filing status||2020 tax year|
|Married, filing jointly||$24,800|
|Married, filing separately||$12,400|
|Head of household||$18,650|
Tax Credits for 2020 to file in 2021
Child Tax Credit: In 2021, the Child Tax Credit offers up to $3,000 per qualifying dependent child 17 or younger on December 31, 2021.
The credit increases to $3,600 if the child is under 6 on December 31, 2021.
When to expect Tax refunds filing: The IRS expects to issue more than 9 out of 10 taxpayer refunds in less than 21 days. The “Where’s My Refund?”(link https://www.irs.gov/refunds) and IRS2Go app (link https://www.irs.gov/uac/irs2goapp), is the best way to check the status of a refund.
You can begin checking the status of your refund within 24 hours after the IRS has received your e-filed tax return or four weeks after mailing your paper return.
For further details and doubts visit: https://www.irs.gov/individuals/itin-expiration-faqs
Online Tax Filing Options for e-filing
If you are filing first time and applying for ITIN, you cannot e-file your return. Most online tax services offer a free filing service if you’ll be using Form 1040EZ or 1040A. For free filing on simple federal, TurboTax, H&R Block, Tax Act, Free file (IRS) and e-file (IRS) are excellent options. TurboTax is the most widely used user friendly and headache-free option for federal tax return.
Its free edition can easily be used if one has income of less than $100,000 and doesn’t have sizeable medical bills to deduct and doesn’t claim any rental, investment, or business income. H&R gives you easy face to face access to tax advisers if your taxes get complicated.
However, they may NOT support Form 1040NR which you have to use as a non-resident alien for tax purposes
Any other topics that I have missed ? Any questions ?