![]() The federal estate tax exclusion for decedents dying will increase to $11.58 million per person or $23.16 million per married couple. (For more on the kiddie tax, click here.) ![]() Under the TCJA, your child must pay taxes on their unearned income, but if that amount is more than $1,100, but less than $11,000, you may be able to elect to include that income on your return rather than file a separate return for your child. For 2020, those amounts will look like this:įor 2020, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,100 or the sum of $350 and the individual’s earned income (not to exceed the regular standard deduction amount). The deduction is subject to threshold and phased-in amounts. Section 199A deduction (also called the pass-through deduction)Īs part of the TCJA, sole proprietors and owners of pass-through businesses are eligible for a deduction of up to 20% to bring the tax rate lower for qualified business income. However, as a result of the TCJA, there are no Pease limitations in 2020 (though there are rumblings in Congress about changing that-click here for more). The additional standard deduction amount will increase to $1,650 if the individual is also unmarried and not a surviving spouse.įor those high-income taxpayers who itemize their deductions, the Pease limitations, named after former Representative Don Pease (D-OH) used to cap or phase out certain deductions. The additional standard deduction amount for the aged or the blind will be $1,350. the sum of $350 plus the individual’s earned income.Here are the projected standard deduction amounts for 2020:Īlso, for 2020, it’s predicted that the standard deduction for an individual who may be claimed as a dependent by another taxpayer will not be more than: With inflation, those amounts remain the same for most taxpayers next year. ![]() (For more on IRS guidelines on qualifying relatives for purposes of the expanded child tax credit, click here.)Īs part of the TCJA, the amount of the standard deduction doubled for most taxpayers in 2018. You were generally allowed one exemption for yourself (unless you could be claimed as a dependent by another taxpayer), one exemption for your spouse if you filed a joint return and one personal exemption for each of your dependents-but that's no longer the case. (For more on what’s changed under the TCJA, click here.)įor purposes of the definition of a qualifying relative, the exemption amount is projected to be $4,250 ($4,300). The first amount, $4,250, is the amount that Bloomberg Tax believes is the literal application of the applicable IRC provision, but the amount in parentheses is the amount they expect the IRS to publish. ![]() As part of the TCJA, there are no personal exemption amounts for 2020. Personal exemptions used to decrease your taxable income before you determined the tax due. ![]()
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