The IRS recently announced key tax figures for 2020, using information based on the Consumer Price Index published by the Department of Labor.
Use these early figures to start developing your tax strategies for next year.
There are currently seven tax brackets ranging from 0 percent to 37 percent. Each of the income brackets increases between 1.59 and 1.80 percent.
| Standard Deduction | Tax Year 2020 | Tax Year 2019 |
|---|---|---|
| Single | $12,400 | $12,200 |
| Head of Household | $18,650 | $18,350 |
| Married Filing Jointly | $24,800 | $24,400 |
| Married Filing Separately | $12,400 | $12,200 |
| Dependents (kiddie tax) | $1,100 | $1,100 |
| 65 or Blind: Married Single |
Add $1,300 Add $1,650 |
Add $1,300 Add $1,650 |
| Tax Year 2020 | Tax Year 2019 | |
|---|---|---|
| Estate & Gift Tax Exclusion | $11.58 million | $11.40 million |
| Annual Gift Tax Exclusion | $15,000 | $15,000 |
| Roth & Traditional IRA Contribution Limit Under Age 50 Age 50 or Over |
$6,000 $7,000 |
$6,000 $7,000 |
| Social Security Benefits Under Full Retirement Age After Full Retirement Age (Earned income may be received without forfeiting benefits) |
$18,240.00 No Limit |
$17,640 No Limit |
Caution: Remember, these early IRS figures are prior to any potential tax law changes currently under consideration in Washington D.C.
2020 Wage Tax Rate Summary:
| Federal Rates | 2020 Current Year | 2019 Prior Year |
|---|---|---|
| FICA Employee & Employer Rate | 6.20% | 6.20% |
| FICA Maximum Liability | $8,537.40 | $8,239.80 |
| Social Security Wage Limit | $137,700 | $132,900 |
| Medicare Employee & Employer Rate | 1.45% | 1.45% |
| Medicare Maximum Liability (each) | No Limit | No Limit |
| Add’l Employee Rate on Wages Exceeding $200,000 | 0.90% | 0.90% |
| FUTA – Employer Rate | 0.60% | 0.60% |
| FUTA – Wage Limit | $7,000 | $7,000 |
| Federal Minimum Wage | $7.25 per hour | $7.25 per hour |
| New Jersey Rates | 2020 Current Year | 2019 Prior Year |
|---|---|---|
| Minimum Wage | $11.00 | $8.85 (Jan 1) $10.00 (July 1) |
| NJ Unemployment & Workforce Development Maximum Earnings – Employer & Employee NJUWD Employee Deduction |
$35,300 0.425% |
$34,400 0.425% |
| Disability Maximum Taxable Employer Earnings Maximum Taxable Employee Earnings Employee Deduction |
$35,300 $134,900 0.26% |
$34,400 $34,400 0.17% |
| Paid Family Leave Insurance (FLI) Maximum Taxable Earnings FLI Employee Deduction FLI Employer Deduction |
$134,900 0.16% None |
$34,400 0.08% None |
| Pennsylvania Rates | 2020 Current Year | 2019 Prior Year |
|---|---|---|
| Minimum Wage | $7.25 | $7.25 |
| PA Unemployment Maximum Taxable Earnings Employee Deduction |
$10,000 0.06% |
$10,000 0.06% |
| Philadelphia City Wage – Residents | 3.8712% | 3.8809% |
| Philadelphia City Wage – Non-Residents | 3.4481% | 3.4567% |
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