2020 Inflation Adjustments and Tax Tables
The IRS has issued its annual inflation adjustments for more than 60 tax provisions. These adjusted amounts will be used to prepare tax year 2020 returns in 2021. Revenue Procedure 2019-44 provides details on the adjustments.
2020 Tax Rates
|Tax Rate||Single||Married Filing Jointly|
|Filing Status||2019 Deduction||2020 Adjusted|
|Married Filing Jointly||$24,000||$24,800|
|Married Filing Single||$12,000||$12,400|
|Head of Household||$18,000||$18,650|
Alternative Minimum Tax
|Married Filing Jointly||$113,400|
|Married Filing Single||$56,700|
|Estates and Trusts||$25,400|
Additional Deductions and Credits
- Medical and Dental: You can deduct expenses that exceed 10% of your adjusted gross income.
- State and Local: Remains the same and is capped at $10,000 per year for married filing jointly taxpayers, or $5,000 per year for taxpayers filing separately.
- Charitable Donations: Charitable cash donations to public charities will remain at 60% for 2020.
- Miscellaneous Deductions: Miscellaneous deductions, including unreimbursed employee expenses and tax preparation expenses, which exceed 2% of your adjusted gross income have been eliminated.
- Adoption Credit: The maximum amount of the adoption credit will increase to $14,300 up from $14,080 in 2019.
- Earned Income Tax Credit: For 2020, the maximum EITC amount available is $6,660 for married taxpayers filing jointly who have three or more qualifying children (it’s $538 for married taxpayer with no children).
- Foreign Earned Income Exclusion: The foreign earned income exclusion has increased from $105,900 to $107,600.
- The personal exemption for tax year 2020 remains at 0, as it was for 2019. This elimination was a provision in the Tax Cuts and Jobs Act.
- As in 2019 and 2018, for tax year 2020 there is no limitation on itemized deductions.
Our Individual & Family Tax Practice is up-to-date on these and other inflation adjustments and ready to assist you in optimizing your tax return. Connect with us today.
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