2020 Tax Facts – 2 Year Comparison.
Here’s is a quick review of some of the tax changes you’ll see from 2019 to 2020 as a result of inflation adjustments and new tax laws.
Provision |
2019 | 2020 |
| Business equipment Sec. 179 expensing deduction | $1,020,000 | $1,040,000 |
| Total purchase limit for full Sec. 179 expensing deduction | $2,550,000 | $2,590,000 |
| Standard mileage rate: business | 58¢ per mile | 57.5¢ per mile |
| Standard mileage rate: medical/moving | 20¢ per mile | 17¢ per mile |
| Mileage rate: charitable activity | 14¢ per mile | 14¢ per mile |
| Maximum wages subject to social security tax | $132,900 | $137,700 |
Social security earnings limit |
||
| – Under full retirement age | $17,640 | $18,240 |
| – Full retirement age | No limit | No limit |
| Top estate tax rate | 40% | 40% |
| Estate tax exemption | $11,400,000 | $11,580,000 |
| Annual gift tax exclusion (per donee) | $15,000 | $15,000 |
Alternative minimum tax exemption |
||
| – Single | $71,700 | $72,900 |
| – Married, joint | $111,700 | $113,400 |
| – Married, separate | $55,850 | $56,700 |
Maximum retirement plan contributions |
||
| – IRA for those under age 50 | $6,000 | $6,000 |
| – IRA for those 50 and over | $7,000 | $7,000 |
| – SIMPLE plan for those under age 50 | $13,000 | $13,500 |
| – SIMPLE plan for those 50 and over | $16,000 | $16,500 |
| – 401(k) plan for those under age 50 | $19,000 | $19,500 |
| – 401(k) plan for those 50 and over | $25,000 | $26,000 |
HSA contribution limits |
||
| – Self only | $3,500 | $3,550 |
| – Family | $7,000 | $7,100 |
| – Additional for 55 & older | $1,000 | $1,000 |
| “Kiddie tax” threshold | $2,200 | $2,200 |
| “Nanny tax” threshold | $2,100 | $2,200 |
| Education savings account contribution (Coverdell) | $2,000 | $2,000 |
| American opportunity (Hope) credit limit | $2,500 | $2,500 |
| Education loan interest deduction | $2,500 | $2,500 |
| Personal exemption (suspended through 2025) | Suspended | Suspended |
| FICA & self-employment tax | ||
| Taxable wages for Social Security/Medicare | Up to $132,900 | Up to $137,700 |
Social Security/Medicare tax rate |
||
| – Employees | 7.65% | 7.65% |
| – Employers | 7.65% | 7.65% |
| – Self-employed | 15.3% | 15.3% |
Standard deduction |
||
| – Single | $12,200 | $12,400 |
| – Joint returns & surviving spouses | $24,400 | $24,800 |
| – Married filing separately | $12,200 | $12,400 |
| – Head of household | $18,350 | $18,650 |
| – Additional for elderly or blind (married) | $1,300 | $1,300 |
| – Additional for elderly or blind (single) | $1,650 | $1,650 |
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