Now that 2020 is finally behind us, it’s time to start thinking about your 2020 taxes. Here are some changes that may impact you:
- Standard deductions increase to $12,400 for single filers and $24,800 for married filing jointly.
- Tax rates remain the same, but income amounts in each bracket have increased.
- Every taxpayer can claim up to $300 in charitable contributions without needing to itemize deductions.
- Received unemployment in 2020? That is taxable income. You’ll receive a 1099 with the total amount.
- Received a stimulus check? That’s an advance on the Recovery Rebate Credit and is not taxable.
- Didn’t receive a stimulus check? If you’re eligible, you’ll receive the same amount in the Recovery Rebate Credit.
- No RMDs for retirees in 2020 and the age has increased from 70.5 to 72.
- 2020 Retirement plan withdrawals of up to $100,000 are not subject to the 10% early withdrawal penalty.
- Up to $10,000 from a 529 plan can be used to pay down student loan debt.
- The contribution limit for 401k increased to $19,500.
But there is some bad news. For all of those W-2 employees that started working from home in 2020, those expenses are not deductible. But you probably saved on commuting, clothing and coffee!
