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Important Tax Figures for 2020

The following table provides some important federal tax information for 2020, as compared with 2019. Some of the dollar amounts are unchanged and some changed only slightly due to inflation.

 

Social Security/ Medicare2020
2019
Social Security Tax Wage Base$137,700$132,900
Medicare Tax Wage BaseNo limitNo limit
Employee portion of Social Security6.2%6.2%
Employee portion of Medicare1.45%1.45%
Individual Retirement Accounts20202019
Roth IRA Individual, up to 100% of earned income$6,000$6,000
Traditional IRA Individual, up to 100% of earned Income$6,000$6,000
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older$1,000$1,000
Qualified Plan Limits20202019
Defined Contribution Plan limit on additions on Sections 415(c)(1)(A)$57,000$56,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))$230,000$225,000
Maximum compensation used to determine contributions$285,000$280,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2))$19,500$19,000
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older$6,500$6,000
SIMPLE deferrals (Section 408(p)(2)(A))$13,500$13,000
SIMPLE additional “catch-up” contributions for employees age 50 and older$3,000$3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B))$130,000$125,000
Compensation defining key employee (officer)$185,000$180,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))$600$600
Driving Deductions20202019
Business mileage, per mile57.5 cents
58 cents
Charitable mileage, per mile14 cents14 cents
Medical and moving, per mile17 cents20 cents
Business Equipment20202019
Maximum Section 179 deduction$1,040,000$1,020,000
Phase out for Section 179$2.59 million$2.55 million
Transportation Fringe Benefit Exclusion20202019
Monthly commuter highway vehicle and transit pass$270$265
Monthly qualified parking$270$265
Standard Deduction20202019
Married filing jointly$24,800$24,400
Single (and married filing separately)$12,400$12,200
Heads of Household$18,650$18,350
Domestic Employees20202019
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.$2,200$2,100
Kiddie Tax20202019
Net unearned income not subject to the “Kiddie Tax”$2,200$2,200
Estate Tax20202019
Federal estate tax exemption
$11.58 million
$11.4 million
Maximum estate tax rate40%40%
Annual Gift Exclusion20202019
Amount you can give each recipient$15,000$15,000

 

This entry was posted on Monday, January 20th, 2020 at 10:42 am. Both comments and pings are currently closed.