This year of 2020 has seen numerous tax changes. Many of the provisions from the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 took effect in 2020 (P.L. 116-94). Other new tax rules stemming from COVID-19 were created for 2020. There were two major tax laws enacted this year: the Family First Coronavirus Response Act (FFCRA) (P.L. 116-127) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). And Congress is still considering more changes this year. But with that said, there are changes afoot for 2021 that can’t be ignored. These changes impact tax planning for individuals and businesses. Here are some of the coming changes to watch.

Health Savings Accounts

Individuals and businesses can begin now to think about their health coverage options for 2021. The IRS has announced inflation adjustments related to health savings accounts (HSAs) (Rev. Proc. 2020-32). A perquisite to contributing to HSAs is having a high-deductible health plan (HDHP). For 2021, an HDHP is coverage requiring a minimum deductible of $1,400 for self-only coverage or $2,800 for family coverage. An HDHP must have a maximum out-of-pocket limit in 2021 of $7,000 for self-only coverage or $14,000 for family coverage. Out-of-pocket deductibles means insurance deductibles, co-payments, and other amounts, but not premiums.