Various Adjustments of Tax Numbers for 2020

Filing statuses: S=single, HH=head of household, MFS=married filing separately, MFJ=married filing joint, QW=qualifying widow(er);
(MAGI means modified adjusted gross income for that deduction)

The Tax Cut and Jobs Act (TCJA) is in effect 2018 through 2025, unless modified or extended in the future. Changes to various tax deductions are indicated below.
Maximum Salary Deferrals: $19,500 for 401(k), 403(b), 501(c), 457 plans; / $13,500 for SIMPLE
'catch-up' contribution limits for age 50+: (additional $6,500 / $3,000 for SIMPLE)
$2,750 for Health FSA
Self-Employed: SEP-IRA: $57,000
Traditional IRA Contributions Limit:
same as 2019.
$6,000 (up to amount of earned income for the year)
  additional catch-up $1,000 for age 50+

Traditional IRA Deduction MAGI Phaseout:
(when also eligible to contribute
to a retirement plan at work)
MFJ, QW:  $104,000-$124,000
S, HH:  $66,000-$76,000
MFS:  0-$10,000 (living apart all year, see S)
And a taxpayer when spouse covered by a plan, MFJ: $196,000-$206,000

Roth IRA Contributions MAGI Phaseout:
MFJ:  $196,000-$206,000
S, HH:  $124,000-$139,000
MFS:  0-$10,000 (living apart all year, see S)

Retirement Savings Credit ('Saver's Credit') AGI Full Phaseout:
MFJ:  $65,000
HH:  $48,750
S, QW, MFS:  $32,500
Social Security: Before retirement age, can earn up to $18,240 without repaying benefits.
  Benefits reduced $1 for each $2 earned over limit
Preceding months in year of reaching retirement age: $48,600.
  Benefits reduced $1 for each $3 earned over limit
On/after retirement month, no limit.
Maximum monthly benefits for 2020: $3,790

Earnings subject to SS tax:
  Employee: $142,800 (maximum $8,854 w/h)
  Household help: cash wages over $2,200
Health Savings Account: Maximum HSA contribution $3,550 individual coverage / $7,100 family coverage.
  additional catch-up $1,000 for age 55+
Child Tax Credit: Had increased to $2,000, with phaseout starting at a higher AGI level of 400K MFJ, 200K others. (TCJA)
Educational Credit:  (MFS ineligible) American Opportunity Credit (aka Hope Credit): same as 2019.
100% of first $2,000, 25% of next $2,000 tuition (all 4 years college)
   MAGI phaseout: $80,000-$90,000 (individual); $160,000-$180,000 (MFJ)
Lifetime Learning Credit: 20% of up to $10,000 tuition (any year college+)
   MAGI phaseout: $59,000-$69,000 (individual); $118,000-$138,000 (MFJ)
Student Loan Interest:  (MFS ineligible) Up to $2,500
MAGI phaseout: $70,000-$85,000 (individual); $140,000-$170,000 (MFJ)
same as 2019.

Earned Income Credit:  (MFS ineligible)
Maximum Earned income/MAGI limit:
$15,820 (no children), $41,756 (one child), $47,440 (two children), $50,954 (three children)
limits increased by $5,690 if MFJ
Maximum credit will range from $538 for no children up to $6,660 for three or more children.
(disqualified if investment income over $3,600, any filing status)
Adoption Credit: Up to $14,300 (phaseout $214,520-$254,520)
'Kiddie Tax' Child under 18/full-time student under 24, with interest/dividends over $2,200
'Secure Act' reversed TCJA which changed tax rates from parents' marginal rate from trust/estate tax brackets.
Standard Mileage Rates:   Business:  57.5¢  (Depreciation adjustment: 27¢)
  Charity:  14¢
  Medical:  17¢
Employee business expenses and nonmilitary moving expenses were eliminated (TCJA).
Itemized Deductions/Personal Exemptions: Through 2025, the tax category limited to 10K (aka SALT limitation) and the deduction phaseout at higher income levels eliminated. With no personal exemptions, that phaseout also not applicable. (TCJA)
Section 179 Expense: total limit for tangible personal property placed in service: $1,040,000
phaseout starts at $2.59M placed in service
Depreciation Limit (with/without bonus depreciation): Passenger auto limit, first year business: $10,100 / $18,100
Capital Gain Tax: Long-term (holding over a year):

0% for taxable income under $40K (S,MFS), $53.6K (HH), $80K (MFJ, QW)
15% for taxable income under $441,450 (S), $469,050 (HH), $496,600 (MFJ, QW) or $248,300 (MFS)
20% for taxable income over those amounts.
Gift Tax Exclusion/ Estate Exclusion: $15,000 / $11,580,000
Foreign Income Exclusion: $107,600

See the original 'NEW TAX LAWS' menu for historical changes.




2020 Standard Deductions New for 2020