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Business Consultation

What's new...

Explore key tax law changes below and see if these changes effect you

What's new...key tax law changes for 2020

Due date of return.

File your tax return by April 15, 2021.

Economic impact payment.

Any economic impact payment you received is not taxable for federal income tax purposes but reduces your recovery rebate credit.

Standard deduction amount increased.

For 2020, the standard deduction amount has been increased for all filers. The amounts are:

• Single or Married filing separately—$12,400;

• Married filing jointly or Qualifying widow(er)—$24,800; and

• Head of household—$18,650

Adoption credit.

The adoption credit and the exclusion for employer-provided adoption benefits have both increased to $14,300 per eligible child in 2020. The amount begins to phase out if you have modified adjusted gross income (MAGI) in excess of $214,520 and is completely phased out if your MAGI is $254,520 or more.

Mortgage insurance premiums.

The itemized deduction for mortgage insurance premiums has been extended through 2020

Deductible IRA contributions.

You no longer need to be younger than age 701/2 to take a deduction for your contributions to an IRA. 

Recovery rebate credit.

This credit is figured like last year's economic impact payment, except the amounts are based on tax year 2020, instead of tax year 2019 (or tax year 2018 if tax year 2019 information was not available). The maximum credit is $1,200 ($2,400 if married filing jointly) plus $500 for each qualifying child.

 

 

Charitable contributions.

If you don't itemize your deductions, you may qualify to take a deduction for charitable contributions of up to $300

Credits for sick and family leave for certain self-employed individuals.

The Families First Coronavirus Relief Act (FFCRA) helps self-employed individuals affected by coronavirus by providing paid sick leave and paid family leave credits equivalent to those that employers are required to provide their employees for qualified sick leave wages and qualified family leave wages paid during the period beginning April 1, 2020, and ending December 31, 2020.

Standard mileage rates.

The 2020 rate for business use of your vehicle is 57.5 cents a mile. The 2020 rate for use of your vehicle to get medical care or to move is 17 cents a mile.

 

Alternative minimum tax (AMT) exemption amount increased.

The AMT exemption amount is increased to $72,900 ($113,400 if married filing jointly or qualifying widow(er); $56,700 if married filing separately). The income levels at which the AMT exemption begins to phase out have increased to $518,400 ($1,036,800 if married filing jointly or qualifying widow(er)). 

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