DISCLAIMER: The information below is intended to highlight changes that have occurred or are scheduled to occur.  I assume no liability for actions that you may or may not take based on the information below.

 

Summary:  For 2020, the following changes will be in effect.

  

   Social Security Wage Base:  $137,700

 

   Kiddie Tax:  A child's unearned income above $2,200 will be taxed at the same rate as the parent’s top rate (modified by the SECURE Act)

 

   Child Tax Credit:  Credit Amount: $2,000                      Refundable Amount: $1,400

 

   Personal Exemptions: Phased out as a result of the Tax Cuts and Jobs Act

 

Deduction for State and Local Taxes: Limited to $10,000 by Tax Cuts and Jobs Act

 

   Employer Retirement Plans:

   Maximum elective deferral to retirement plans, e.g., 401(k), 403(b): $19,500

   Catch-up contribution limit for 401(k), 403(b), and 457 plans: $6,500

   Maximum elective deferral to SIMPLE IRA plans: $13,500

   Catch-up contribution limit for SIMPLE plans: $3,000 (unchanged)

   Maximum elective deferral to 457 plans of government and tax-exempt employers: $19,500

   Limit on annual additions to defined contribution plans: $56,000

   Annual compensation threshold requiring SEP contribution: $600

   Limit on annual additions to SEP plans: $57,000

   Maximum annual compensation taken into account for contributions: $285,000

   Annual benefit limit under defined benefit plans: $230,000

   Amount used in definition of highly compensated employee: $130,000

  

   Flexible Spending Accounts:  Maximum salary reduction contribution: $2,750

 

   Health Savings Account Limits:  Individual: $3,550   Family: $7,100

   Catch-up contribution: Taxpayers who are 55 or older in 2020 may contribute an additional $1,000

 

 

 

 

 

 

 

 

 

   Tax brackets:  Single and Married Filing Separately

Taxable Income

Tax Rate

$0 – $9,875

10% of taxable income

$9,876 – $40,125

$987 plus 12% of the amount over $9,875

$40,126 – $85,525

$4,618 plus 22% of the amount over $40,125

$85,526 – $163,300

$14,606 plus 24% of the amount over $85,525

$163,301 – $207,350

$33,217 plus 32% of the amount over $163,300

$207,351 – $518,400

$47,368 plus 35% of the amount over $207,350

$518,401 or more

$156,235 plus 37% of the amount over $518,400

 

Married Filing Jointly or Qualifying Widow(er)

Taxable Income

Tax Rate

$0 – $19,750

10% of taxable income

$19,751 – $80,250

$1,975 plus 12% of the amount over $19,750

$80,251 – $171,050

$9,235 plus 22% of the amount over $80,250

$171,051 – $326,600

$29,211 plus 24% of the amount over $171,050

$326,601 – $414,700

$66,543 plus 32% of the amount over $326,600

$414,701 – $622,050

$94,735 plus 35% of the amount over $414,700

$622,051 or more

$167,308 plus 37% of the amount over $622,050

 

Head of Household

Taxable Income

Tax Rate

$0 – $14,100

10% of taxable income

$14,101 – $53,700

$1,410plus 12% of the amount over $14,100

$53,701 – $85,500

$6,162 plus 22% of the amount over $53,700

$85,501 – $163,300

$13,158 plus 24% of the amount over $85,500

$163,301 – $207,350

$31,830 plus 32% of the amount over $163,300

$207,351 – $518,400

$45,926 plus 35% of the amount over $207,350

$518,401 or more

$154,794 plus 37% of the amount over $518,400

 

Standard Deductions

Filing Status

Standard Deduction Amount

Single and Married Filing Separately

$12,400

Married Filing Jointly or Qualifying Widow(er)

$24,800

Head of Household

$18,650

 

  

   Estates and Trusts

 

Taxable Income

Tax Rate

Not over $2,600

10% of the taxable income

$2,600 - $9,450

$260 plus 24% of the excess over $2,600

$9,451 - $12,950

$1,904 plus 35% of the excess over $9,450

Over $12,950

$3,129 plus 37% of the excess over $12,950

                                                 

 

   Estate Tax Exclusion:  The Federal estate and gift tax exclusion for 2020 has increased to $11.58 Million          

 

   Gift Tax Exclusion:  The annual gift tax exclusion remains unchanged at $15,000