This just in from Internal Revenue Service (IRS) <firstname.lastname@example.org> (see web page at https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020):
The tax items for tax year 2020 of greatest interest to most taxpayers include the following dollar amounts:
- The standard deduction for married filing jointly rises to $24,800 for tax year 2020, up $400 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,400 for 2020, up $200, and for heads of households, the standard deduction will be $18,650 for tax year 2020, up $300.
- (ed. The lowest rate is really Zero 0% – a married family which brings in $24,800 or less does not owe any Federal Income tax. You must earn more than $24,800 to be taxable at all.)
- The lowest rate is 10% for incomes over and above the standard deduction: single individuals with incomes of $9,875 or less and $19,750 for married couples filing jointly. [[ed. to clarify: to owe any tax at all for 2019 a family must earn at least $24,801 – $24,800 is subtracted off as the standard deduction, and 10% tax is owed on the remaining $1, or 10 cents tax total. You must earn $19,751 more than $24,800 to owe 12 cents tax on the $1 over $24,800+$19,750. By comparison the standard deduction in year 2016 was only $12,600 – half as much – so you had to pay 10% tax starting at $12,601 and the next bracket was 15% not 12% and started at only $9,275. See the Forbes article here]]
- 37% for individual single taxpayers with incomes greater than $518,400 ($622,050 for married couples filing jointly).
- 35%, for incomes over $207,350 ($414,700 for married couples filing jointly);
- 32% for incomes over $163,300 ($326,600 for married couples filing jointly);
- 24% for incomes over $85,525 ($171,050 for married couples filing jointly);
- 22% for incomes over $40,125 ($80,250 for married couples filing jointly);
- 12% for incomes over $9,875 ($19,750 for married couples filing jointly).
- For 2020, as in 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
- The tax year 2020 maximum Earned Income Credit amount is $6,660 for qualifying taxpayers who have three or more qualifying children, up from a total of $6,557 for tax year 2019. The revenue procedure contains a table providing maximum credit amounts for other categories, income thresholds and phase-outs.
- For tax year 2020, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $118,000, up from $116,000 for tax year 2019.
- For tax year 2020, the foreign earned income exclusion is $107,600 up from $105,900 for tax year 2019.
- Estates of decedents who die during 2020 have a basic exclusion amount of $11,580,000, up from a total of $11,400,000 for estates of decedents who died in 2019.
- The annual exclusion for gifts is $15,000 for calendar year 2020, as it was for calendar year 2019.
- The maximum credit allowed for adoptions for tax year 2020 is the amount of qualified adoption expenses up to $14,300, up from $14,080 for 2019.