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Important Tax Figures for 2020

H&CO : Feb 9, 2020 12:57:18 PM

Tax

Every year, the dollar amounts allowed for various federal tax benefits are subject to change based on inflation adjustments and legislation. Here are some important tax figures for 2020, compared with 2019, including the estate tax exemption, Social Security wage base, qualified retirement plan and IRA contribution limits, driving deductions, allowable business write-off amounts and more.

Social Security/ Medicare	2020	2019
Social Security Tax Wage Base	$137,700	$132,900
Medicare Tax Wage Base	No limit	No limit
Employee portion of Social Security	6.2%	6.2%
Employee portion of Medicare	1.45%	1.45%
Individual Retirement Accounts	2020	2019
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 Limits	2020	2019
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 Deductions	2020	2019
Business mileage, per mile	57.5 cents	58 cents
Charitable mileage, per mile	14 cents	14 cents
Medical and moving, per mile	17 cents	20 cents
Business Equipment	2020	2019
Maximum Section 179 deduction	$1,040,000	$1,020,000
Phase out for Section 179	$2.59 million	$2.55 million
Transportation Fringe Benefit Exclusion	2020	2019
Monthly commuter highway vehicle and transit pass	$270	$265
Monthly qualified parking	$270	$265
Standard Deduction	2020	2019
Married filing jointly	$24,800	$24,400
Single (and married filing separately)	$12,400	$12,200
Heads of Household	$18,650	$18,350
Domestic Employees	2020	2019
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.	$2,200	$2,100
Kiddie Tax	2020	2019
Net unearned income not subject to the "Kiddie Tax"	$2,200	$2,200
Estate Tax	2020	2019
Federal estate tax exemption	$11.58 million	$11.4 million
Maximum estate tax rate	40%	40%
Annual Gift Exclusion	2020	2019
Amount you can give each recipient	$15,000	$15,000ffff