2020
Please be aware that a large number of individual tax items of the 2018 Tax Act sunset in 2025.
New Alimony Rules: For Agreements executed or modified after 12/31/2018, alimony received is not income and alimony paid is not a deduction. However, parties can elect to follow any new rules that will be effective in 2026 as long as indicated in executed agreement.
Auto Mileage Rates for 2020: Released December 31, 2019
Business—57.5 cents per mile
Charity—14 cents per mile
Medical—17 cents per mile
Moving—17 cents per mile
Gift Exclusion Annual Amount for 2020:
$15,000
Foreign Earned Income Exclusion Annual Amount for 2020:
$107,600
Long-Term Care Insurance Premium Limits for 2020:
Age 40 or less: $ 430
More than 40, less than 51: $810
More than 50, less than 61: $1,630
More than 60, less than 71: $4,350
More than 70: $5,430
HSA contribution amounts for 2020:
Individual— $3,550 (+$1,000 for over age 55)
Family— $7,100 (+$1,000 for over age 55)
Compensation limits (401, 404, 408) for 2021:
$285,000
Election to Expense Certain Depreciation Assets (Section 179) for 2020:
$1,000,000 (limit on capital purchases: $2,500,000).
Standard Deductions for 2020:
$24,800 (MFJ, Surviving Spouse);
$18,650 (HOH);
and $12,400 (Single, MFS).
Additional deduction for aged or blind is $1,300 ($1,650 for unmarried taxpayers).
Additional Medicare Tax for 2020:
3.8% surtax on net investment income and 0.9% Medicare contributions tax on earned income when adjusted gross income exceeds:
$250,000 (MFJ, Surviving Spouse);
$200,000 (HOH and Single);
and $125,000 (MFS)
Deduction for Pass-through (includes Sole Shareholders) Entities:
20% of Qualified Business Income (QBI) limited to 50% of W-2 Wages or 25% of wages and 2.5% of Qualified Property Unadjusted Basis. Income limitations for service industries. QBI thresholds are $326,600 (MFJ); $163,300 (MFS) and $163,300 (S/HOH).
Depreciation Component:
For business purposes of standard mileage rates are:
24 cents in 2015 and 2016;
25 cents in 2017 and 2018;
26 cents in 2019;
27 cents in 2020;
Estate and Gift Lifetime Exclusion for 2020:
$11.58 million ($23.16M for spousal portability election)
Social Security Numbers for 2020:
Wage Limit: $137,700
Quarter of Coverage: $1,410
Retirement Earnings Tax Exempt Amounts if under retirement age: $18,240/yr ($1,520/mo).
Retirement Earnings Tax Exempt Amounts for year attaining retirement age before birth date: $48,600/yr ($4,050/mo). Benefit Reduction for months prior to full retirement age: $1 of benefits for every $3 earnings over limit
FSA contribution amounts for 2020:
$2,750.
Retirement Deferrals for 2020:
401(k) — $19,500 (age 50 and over catch-up is $6,500)
Simple — $13,500 (age 50 and over catch-up is $3,000)
IRA — $6,000 (age 50 and over catch-up is $1,000)
Defined Contribution Plan — $57,000
Child Tax Credit in 2021:
$2,000 (Maximum refundable portion per child of $1,400) for children under 17 years of age. Other dependents qualify for a $500 nonrefundable credit.
Bonus Depreciation in First Year:
100% Bonus Depreciation in First Year until 12/31/2022.
Alternative Minimum Tax for 2020:
For 2020, the exemption amounts are $72,900 (Single/HOH); $113,400 (MFJ) and $56,700 for (MFS) and do not phase out until $518,400 (Single/HOH/MFS) and $1,036,800 (MFJ). The 28% rate applies to excess AMTI of $197,900 (MFJ) and $98,950 (Single/HOH/MFS)
ACA Penalty for 2020:
For 2020, the penalty for not maintaining minimum essential health coverage: $0