Federal Tax Updates
Here’s what’s new for 2020:
- Alternative Minimum Tax (AMT) exemption amounts increased:
-
- For single or head of household — $53,600
- For married filing jointly or qualifying widow(er) — $83,400
- For married filing separately — $41,700
- IRA deduction expanded — You might be able to claim a deduction if both of these apply:
- You were covered by a retirement plan.
- Your income was less than $71,000 — or $118,000 for married filing jointly or qualifying widow(er)
If your spouse was covered by a retirement plan but you weren’t, you might be able to claim a deduction. Your income has to be less than $193,000 to claim a deduction in this case.
- Current standard mileage rates:
- $0.575 a mile for business use of a vehicle
- 23.5 cents a mile for medical care
- Earned Income Credit (EIC) maximum income changes are:
- Three or more children lived with you and you earned less than $47,747 — or $53,267 if married filing jointly
- Two children lived with you and you earned less than $47,440 — or $49,974 if married filing jointly
- One child lived with you and you earned less than $41,756 — or $44,651 if married filing jointly
- No children lived with you and you earned less than $15,820 — or $20,330 if married filing jointly
- The maximum investment income you can earn and still get the EIC increased to $3,650.
- Elective salary deferrals:
- No exceptions — maximum amount is $18,000
- SIMPLE plans only — maximum amount is $12,500
- 403(b) plans and qualify for the 15-year rule — maximum amount is $21,000
- Catch-up contributions for taxpayers age 50 or over has increased to $6,000. Exceptions include for Section 401(k)(11) and SIMPLE plans
Related Resources
Receive an IRS 693 letter? Learn more about letter 693, why you received it, and how to handle it with help from the tax experts at H&R Block.
Get the facts from H&R Block about the refund statute expiration date (RSED). Read the IRS definition and get more insight from the experts at H&R Block.
Learn about the benefits you might receive if you pay your taxes early. H&R Block’s experts explain what you should do if you owe an underpayment penalty.
If you paid tuition to a qualified college or university, you should receive a Form 1098-T. Learn more from the tax experts at H&R Block.