Tax News

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 2020These can no longer be claimed.

  • Moving Expense
  • Casualty and Theft Losses
  • Miscellaneous Deductions
  • Unreimbursed Employee Expenses
  • Tax Preparation Expenses

Business 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.