The IRS recently issued new increases to tax deduction and contribution limits for tax year 2020. These increases are from the annual inflation adjustment that the IRS makes towards multiple tax schedules.
Listed below are some brief highlights on some of the adjustments that the IRS released to be applied in the 2020 tax year:
- 401(K) contributions for 2019 is $19,000 but the maximum amount increased to $19,500 in 2020
- 401(K) catch-up contributions for those age 50 and over for 2019 is $6,000 but maximum amount increases to $6,500 in 2020
- SIMPLE retirement limits for 2019 is $13,000 and the maximum amount increased to $13,500 in 2020
- Roth and Traditional IRA annual contribution stay at the 2019 amount of $6,000
- Roth and Traditional IRA catch-up contribution stay the same for those age 50 and over at the 2019 amount of $1,000
- The standard deduction for 2019 for Married Filing Jointly is 24,400 and increases to $24,800 for 2020; Filing Single and Married Filing Separately for 2019 is $12,200 and increases to $12,400 for 2020; and Head of Household for 2019 is $18,350 and increases to $18,650 in 2020
- Health Flexible Spending limit for 2019 is $2,700 and increases to $2,750 in 2020
- Health Saving Account limit for 2019 is $3,500 for Single Coverage, $7,000 for Family Coverage and Catch-Up contribution for age 55 and over is $1,000; 2020 amounts increase to $3,550 for Single Coverage, $7,100 for Family Coverage and Catch-Up contribution stays at $1,000
- Estates of decedents and Lifetime Gifting Exclusion for 2019 is $11,400,000 and the 2020 amount increases to $11,580,000
- Annual Gifting Exclusion for 2019 and 2020 stays at $15,000
If you would like to speak to one of our tax specialists for more information, please call: 1 (866) 760-0940, visit our website, or send a note to Miranda.Hawk@brixeyandmeyer.com to setup a time to speak.