What’s New for 2020
The Standard Deduction went up again this year:
Individual from $12,200 to $12,400
Head of Household from $18,350 to $18,650
Married Filing Jointly from $24,400 to $24,800
- The ACA (Affordable Care Act) individual mandate penalty no longer applies for lack of health insurance.
- Medical Deductions are again based on expenses that exceed 10% of your adjusted gross income. You must itemize to claim this.
- The child tax credit ($2000) and the other dependent tax credit ($500) has stayed the same for 2020.
- Student Loan Interest, Child and Dependent Care Expenses and Education credits are all allowed for 2020.
- Solar Energy Credit is reduced to 26% from 30% for 2020 and it will go down each year. Other Energy Credits have stayed the same.
- A Charitable Contribution of $300 can be claimed for 2020 on the 1040 without filing itemized taxes.
- Late Filing Penalties have increased for 2020.
- Federal Tax Brackets have widened for 2020 and range from 10% to 37%.
- Required Minimum Distribution (RMD) age has increased to age 72 along with other changes to 401K’s and IRA’s.
- Recovery rebates must be claimed on the tax return but will probably be reduced to zero with tax credits depending on income.
Still Gone for 2020 – These can no longer be claimed.
- Moving Expense
- Casualty and Theft Losses
- Miscellaneous Deductions
- Unreimbursed Employee Expenses
- Tax Preparation Expenses
- Pass-Through income and the qualified business income deduction of 20% are again eligible for a qualified business in 2019.
- The Standard Mileage Rate has decreased to 57.5 cents per mile for 2020.
- Eligible deductions include:
- Business use of a car
- Business use of a home
- Meals and entertainment
- Rent expense
- Interest and Taxes
- Supplies and Materials
There are many other business deductions available. Call me for more information.