2020 Tax Facts – 2 Year Comparison

 

2020 Tax Facts – 2 Year Comparison.

Here’s is a quick review of some of the tax changes you’ll see from 2019 to 2020 as a result of inflation adjustments and new tax laws.

Provision
2019 2020
Business equipment Sec. 179 expensing deduction $1,020,000 $1,040,000
Total purchase limit for full Sec. 179 expensing deduction $2,550,000 $2,590,000
Standard mileage rate: business 58¢ per mile 57.5¢ per mile
Standard mileage rate: medical/moving 20¢ per mile 17¢ per mile
Mileage rate: charitable activity 14¢ per mile 14¢ per mile
Maximum wages subject to social security tax $132,900 $137,700
Social security earnings limit
– Under full retirement age $17,640 $18,240
– Full retirement age No limit No limit
Top estate tax rate 40% 40%
Estate tax exemption $11,400,000 $11,580,000
Annual gift tax exclusion (per donee) $15,000 $15,000
Alternative minimum tax exemption
– Single $71,700 $72,900
– Married, joint $111,700 $113,400
– Married, separate $55,850 $56,700
Maximum retirement plan contributions
– IRA for those under age 50 $6,000 $6,000
– IRA for those 50 and over $7,000 $7,000
– SIMPLE plan for those under age 50 $13,000 $13,500
– SIMPLE plan for those 50 and over $16,000 $16,500
– 401(k) plan for those under age 50 $19,000 $19,500
– 401(k) plan for those 50 and over $25,000 $26,000
HSA contribution limits
– Self only $3,500 $3,550
– Family $7,000 $7,100
– Additional for 55 & older $1,000 $1,000
“Kiddie tax” threshold $2,200 $2,200
“Nanny tax” threshold $2,100 $2,200
Education savings account contribution (Coverdell) $2,000 $2,000
American opportunity (Hope) credit limit $2,500 $2,500
Education loan interest deduction $2,500 $2,500
Personal exemption (suspended through 2025) Suspended Suspended
FICA & self-employment tax
Taxable wages for Social Security/Medicare Up to $132,900 Up to $137,700
Social Security/Medicare tax rate
– Employees 7.65% 7.65%
– Employers 7.65% 7.65%
– Self-employed 15.3% 15.3%
Standard deduction
– Single $12,200 $12,400
– Joint returns & surviving spouses $24,400 $24,800
– Married filing separately $12,200 $12,400
– Head of household $18,350 $18,650
– Additional for elderly or blind (married) $1,300 $1,300
– Additional for elderly or blind (single) $1,650 $1,650

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