Tax
Insights

Important Tax Figures for 2020

 

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