In this guide, we will explore where your tax dollars go and some of the ways tax filing may look different in 2021 as well as what you can do to prepare. Keep in mind, this guide is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before
modifying your strategy.
Before we dive into the upcoming tax brackets and what you can do to prepare for 2021, it can be helpful to understand precisely where the government allocates your federal tax dollars. In 2019, the federal government spent $4.4 trillion, which equals 21% of the nation’s gross domestic product (GDP). Further examination reveals that three significant areas of spending make up the majority of the budget.1