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Individual Income Tax Planning (2020)

Adoption credit

Adoption credit 2019 2020
Maximum credit $14,080 $14,300
Phaseout threshold amount $211,160 $214,520
Completed phaseout amount after $251,160 $254,520


Alternative Minimum Tax (AMT)

Maximum AMT exemption amount 2019 2020
Married filing jointly or surviving spouse $111,700 $113,400
Single or head of household $71,700 $72,900
Married filing separately $55,850 $56,700
AMT income exemption phaseout threshold 2019 2020
Married filing jointly or surviving spouse $1,020,600 $1,036,800
Single or head of household $510,300 $518,400
Married filing separately $510,300 $518,400
AMT tax rate (26% rate applies to AMTI at or below amount; 28% applies to AMTI above amount) 2019 2020
All taxpayers except married filing separately $194,800 $197,900
Married filing separately $97,400 $98,950


Charitable deductions

Use of auto 2019 2020
Deductible standard mileage rate $0.14 $0.14
Charitable fundraising "insubstantial benefit" limitation 2019 2020
Low-cost article (re: unrelated business income) $11.10 $11.20
Gifts to donor in return for contribution 2019 2020
Token gift maximum cost1 $11.10 $11.20
Minimum contribution amount1 $55.50 $56
2% threshold amount2 $111 $112

1 Contribution is fully deductible if minimum contribution amount is met and cost of token gift does not exceed maximum

2 Charitable contribution is fully deductible if the benefit received by the donor doesn't exceed the lesser of the threshold amount or 2% of the amount of the contribution

Child tax credit

Amount of credit 2019 2020
Maximum credit per qualifying child $2,000 $2,000
Nonrefundable credit for dependents who are not qualifying children $500 $500
Phaseout -- credit reduced by $50 for each $1,000 or fraction thereof of MAGI over: 2019 2020
Single $200,000 $200,000
Married Filing Jointly $400,000 $400,000
Married Filing Separately $200,000 $200,000
Refundability -- up to specified percentage of earned income in excess of specified amount 2019 2020
Percentage 15% 15%
Amount $2,500 $2,500
Maximum refundable amount of credit $1,400 $1,400


Classroom expenses of elementary and secondary school teachers

Classroom expense deduction 2019 2020
Maximum above-the-line deduction $250 $250


Earned income tax credit (EITC)

Investment income limit 2019 2020
Excessive investment income limit ("disqualified income limit") $3,600 $3,650
Maximum amount of EITC per number of children 2019 2020
0 children $529 $538
1 child $3,526 $3,584
2 children $5,828 $5,920
3 or more children $6,557 $6,660
Maximum amount of earned income on which EITC is based (earned income over this amount but under the threshold phaseout amount will not change the amount of the credit received) 2019 2020
0 children $6,920 $7,030
1 child $10,370 $10,540
2 or more children $14,570 $14,800
Threshold phaseout amount for joint filers per number of children 2019 2020
0 children $14,450 $14,680
1 child $24,820 $25,220
2 children $24,820 $25,220
3 or more children $24,820 $25,220
Threshold phaseout amount for other filers per number of children 2019 2020
0 children $8,650 $8,790
1 child $19,030 $19,330
2 children $19,030 $19,330
3 or more children $19,030 $19,330
Completed phaseout amount for joint filers per number of children 2019 2020
0 children $21,370 $21,710
1 child $46,884 $47,646
2 children $52,493 $53,330
3 or more children $55,952 $56,844
Completed phaseout amount for other filers per number of children 2018 2020
0 children $15,270 $15,820
1 child $40,320 $41,756
2 children $45,802 $47,440
3 or more children $49,194 $50,954


Expatriation

Covered expatriate 2019 2020
An individual with "average annual net income tax" of more than this amount for the five taxable years ending before his or her loss of citizenship is a covered expatriate for the purposes of IRC §877A(g)(1) $168,000 $171,000
IRC §877A(3) exclusion amount $725,000 $737,000


Foreign earned income

Amount excluded from income 2019 2020
Exclusion amount $105,900 $107,600


Itemized deductions

Phaseout threshold 2019 2020
Married filing jointly N/A N/A
Head of household N/A N/A
Unmarried N/A N/A
Married filing separately N/A N/A


Kiddie tax

Unearned income limit 2019 2020
Amount exempt from tax $1,100 $1,100
Additional amount taxed at child's rate $1,100 $1,100
Unearned income over this amount generally taxed at parents' tax rates1 $2,200 $2,200
Parent's election 2019 2020
Election to include child's income on parent's return -- child's gross income requirement $1,100 - $11,000 $1,100 - $11,000
AMT 2019 2020
AMT exemption for child subject to kiddie tax Lesser of $7,750 + child's earned income or $71,700 Lesser of $7,900 + child's earned income or $72,900

1 Taxed at parents' tax rates in 2020. In 2018 and 2019, taxed at trust and estate income tax rates (special rules apply to alternative minimum tax purposes) but retroactive election may be made to tax at parents' tax rates.

Medicare tax (additional payroll tax and unearned income contribution tax)

Payroll tax 2019 2020
Additional Medicare payroll tax (and self-employment tax) percentage rate 0.90% 0.90%
Applies to wages/self-employment income exceeding 2019 2020
Individuals $200,000 $200,000
Married filing jointly $250,000 $250,000
Married filing separately $125,000 $125,000
Tax on unearned income 2019 2020
Unearned income Medicare contribution tax rate 3.80% 3.80%
Applies to lesser of (a) net investment income or (b) modified adjusted gross income exceeding 2019 2020
Individuals $200,000 $200,000
Married filing jointly $250,000 $250,000
Married filing separately $125,000 $125,000


Nanny tax

Compensation threshold 2019 2020
Domestic employee coverage threshold $2,100 $2,200


Personal exemption amount

Amount 2019 2020
Personal exemption amount N/A N/A
Married filing jointly 2019 2020
Phaseout threshold amount N/A N/A
Completed phaseout amount after N/A N/A
Head of household 2019 2020
Phaseout threshold amount N/A N/A
Completed phaseout amount after N/A N/A
Unmarried 2019 2020
Phaseout threshold amount N/A N/A
Completed phaseout amount after N/A N/A
Married filing separately 2019 2020
Phaseout threshold amount N/A N/A
Completed phaseout amount after N/A N/A


"Saver's Credit"

Elective Deferrals and IRA or ABLE Contributions by Certain Individuals 2019 2020
Maximum credit amount $1,000 $1,000
Applicable percentage of 50% applies to AGI 2019 2020
Joint Return $0 - $38,500 $0 - $39,000
Head of Household $0 - $28,875 $0 - $29,250
Other $0 - $19,250 $0 - $19,500
Applicable percentage of 20% applies to AGI 2019 2020
Joint Return $38,501 - $41,500 $39,001 - $42,500
Head of Household $28,876 - $31,125 $29,251 - $31,875
Other $19,251 - $20,750 $19,501 - $21,250
Applicable percentage of 10% applies to AGI 2019 2020
Joint Return $41,501 - $64,000 $42,501 - $65,000
Head of Household $31,126 - $48,000 $31,876 - $48,750
Other $20,751 - $32,000 $21,251 - $32,500
Applicable percentage of 0% applies to AGI 2019 2020
Joint Return Over $64,000 Over $65,000
Head of Household Over $48,000 Over $48,750
Other Over $32,000 Over $32,500


Standard deductions

Amounts 2019 2020
Married filing jointly or surviving spouse $24,400 $24,800
Head of household $18,350 $18,650
Unmarried $12,200 $12,400
Married filing separately $12,200 $12,400
Dependent--Standard deduction cannot exceed the greater of: $1,100 or $350 + earned income $1,100 or $350 + earned income
Additional deduction for aged or blind (single or head of household) $1,650 $1,650
Additional deduction for aged or blind (all other filing statuses) $1,300 $1,300


Standard mileage rates

Applicable rates 2019 2020
Use of auto for business purposes (cents per mile) $0.58 $0.575
Use of auto for medical purposes (cents per mile) $0.20 $0.17
Use of auto for moving purposes (cents per mile) $0.20 $0.17

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Prepared by Broadridge Advisor Solutions Copyright 2020.