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.