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December 18, 2019 | Posted in:

IRS Releases Key 2020 Tax Information

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.

Tax Brackets:

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 Deductions:

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

 

Other Key Figures:

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.

 


 

Business and Payroll Figures to Know

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%

 

 

Click Here for Upcoming 2019-2020 Tax Deadlines →

Download our 2020 Payroll Tax Alert [PDF] →

Author:

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