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2020 Tax Tips
Here are some changes and updates to the most recent tax laws for this current tax season.

2020 Tax Brackets

Rate For Single Individuals, Taxable Income Over For Married Individuals Filing Joint Returns, Taxable Income Over For Heads of Household, Taxable Income Over
10% $0 $0 $0
12% $9,875 $19,750 $14,100
22% $40,125 $80,250 $53,700
24% $85,525 $171,050 $85,500
32% $163,300 $326,600 $163,300
35% $207,350 $414,700 $207,350
37% $518,400 $622,050 $518,400

Other Changes

  • The Standard deduction is now $12,400/$24,800.
  • 401(k)/403(b)/408(k) contribution limits increased to $19,500 plus an additional $6,500 for employees over 50.

SECURE ACT (December 2019) highlights:

    1. There are new rules designed to assist small businesses with the creation of a retirement plan.
    2. New rules have been designed to make long-term part-time employees eligible for retirement plan contributions.
    3. There are increased penalties for failure to file retirement plan tax returns (form 5500)
    4. There was a repeal of maximum age for traditional IRA contributions.
    5. The age for required minimum distributions raised from 70 1/2 to 72.
    6. Tax free Section 529 Plan distributions may be used to pay student loans.
    7. Penalty-free retirement plan withdrawals can be used for expenses related to birth or adoption of a child.

Extender Legislation passed by Congress (existing law in 2019 extended through 2020)

  1. Mortgage insurance premiums are treated as mortgage interest.
  2. There is a reduction in the medical expense deduction floor from 10.0% of AGI to 7.5% of AGI.
  3. There is a return of the above-lie qualified tuition deduction.
  4. The Qualified energy credit is up to 10% of energy efficient residential improvements.
  5. There is an energy efficient commercial building deduction of up to $1.80 per square foot.
  6. Employer tax credits include paid family leave/work opportunity
  7. There is a health coverage tax credit (HCTC) for certain individuals.