What’s an accountants’ least favorite holiday? New Years Day!
With the New Year, new IRS limits and reimbursement rates are now in effect. Below is a quick summary of these key amounts:
Most of these changes are taxpayer-friendly, as they are increasing the amounts that can be deferred or otherwise used in a tax-advantaged manner. We anticipate that the 2021 amounts will continue to increase as the economy grows.
Taxpayers should review their current elections and make any necessary changes to make sure they are contributing to these accounts based on these new limits. Further, New Years is a good time for taxpayers to review their withholdings, especially considering the new Form W-4 released in late 2019 and effective January 1, 2020.
Business owners should make sure they are aware of these limits and update policies accordingly, as well as make sure that they are taking advantage of these new amounts themselves, where applicable.