2020 Year End Highlights
- PPP Loan Forgiveness applications may be submitted now;
- Section 179 equipment expensing has been increased to $1,020,000;
- Qualified Business Income Deduction remains at 20%, with restrictions, particularly for certain businesses;
- 100% bonus depreciation extended through December 31, 2022;
- AMT exemptions are increasing for 2020. The Tax Cut and Jobs Act increases the AMT exemption for joint filers to $111,700 and $71,700 for others.
- Estate and gift tax exemption rises to $11,400,000 in 2020; after December 31, 2025, the amount returns to 2017 exemptions.
- De minimis safe harbor for taxpayers with no AFS (applicable financial statement) raised to $2,500.
- The standard mileage rate increases to $.575 per mile for 2020 ($.58 in 2019).
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Individual Provisions Available for 2020 and Future Years
- Deduction for expenses of elementary and secondary school teachers - $250
- Mortgage debt forgiveness
- Deduction for mortgage insurance premiums (retroactively extended to 2018, as well)
- Deduction for state and local taxes limited to $10,000 deduction in 2020 and thereafter
- Tax-free distributions from individual retirement plan for charitable purposes
- Significant changes to individual provisions have been implemented by the Tax Cuts and Jobs Act for 2018.
We advise you to visit us soon to determine your 2020 tax liability and potentially prepay it before it becomes a penalty issue in April. For 2020, the Tax Cuts and Jobs Act of last year continues the new rate brackets, increased standard deduction, reduced deductions for personal mortage interest and state and local taxes, and decreased corporate income tax rates. Miscellaneous itemized deductions (such as deductions for unreimbursed employee business expenses and investment advisory fees) continue to be nondeductible in 2020.
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If you have any questions about any of these provisions, please contact us!
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