2020 Reference Material - taxschool.illinois.edu

[Pages:18]2020 Workbook

Reference Material

Inflation Adjusted Items and Other Useful Information ........................................ R1

Depreciation Limits for Luxury Vehicles1 ............. R6

Saver's Credit -- 2020 (Retirement Savings Contributions Credit) ........... R7

Qualified Retirement Plan Limitations .................. R7

Uniform Lifetime Table/Single Life Expectancy Table ..................................................... R8

Other Rates for Vehicles .......................................... R9

Tax Rates for 2020 .................................................... R9

Federal Land Bank Interest Rates for Valuing Farmland Under Special Use Valuation Rules of IRC ?2032A ............................ R11

Interest Rates for Noncorporate Overpayments and Underpayments of Tax 2010?2020 ................ R12

Interest Rates on Corporate Overpayments and Underpayments of Tax 2016?2020 ................ R13

Interest Rates on Large Corporate Overpayments and Underpayments of Tax 2016?2020 ................ R13

Applicable Federal Rates for October 2018 through September 2020 ................ R14

Please note. Corrections for all of the chapters are available at TaxSchool.illinois.edu. For clarification about acronyms used throughout this chapter, see the Acronym Glossary at the end of the Index.

INFLATION ADJUSTED ITEMS AND OTHER USEFUL INFORMATION

Standard Deductions

Joint or Qualifying Widow(er) Single Head of Household Married Filing Separately Additional for Elderly/Blind MFJ, MFS, QW Additional for Elderly/Blind Single, HoH Taxpayer Claimed as Dependent

2019

$ 24,400 12,200 18,350 12,200 1,300 1,650 1,100 a

Exemption Amounts for Alternative Minimum Tax (AMT)

Joint or Qualifying Widow(er) and Surviving Spouse Single or Head of Household Married Filing Separately Estates and trusts

111,700 71,700 55,850 25,000

AMT Phaseouts

Single, HoH, MFS, QW MFJ Estates and trusts

510,300 1,020,600

83,500

Long-Term Care Premium Limitations

Age 40 or less Age more than 40 but not more than 50 Age more than 50 but not more than 60 Age more than 60 but not more than 70 Age more than 70

420 780 1,580 4,220 5,270

a The 2019 and 2020 standard deductions are the greater of $1,100, or $350 plus the dependent's earned income.

2020

$ 24,800 12,400 18,650 12,400 1,300 1,650 1,100 a

113,400 72,900 56,700 25,400

518,400 1,036,800

84,800

430 810 1,630 4,350 5,430

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2020 Workbook

Child's Unearned Income Not Subject to Parent's Tax Rate

IRC ?179 Deduction Limit IRC ?179 Deduction Limit

IRC ?179 Asset Limitation

sport utility vehicle

Taxable Income Threshold for Qualifying Business Income Deduction (QBID) Married filing jointly Married filing separately All others

FICA/SE Tax Information

OASDI Tax Maximum Earnings FICA (OASDI and HI) Tax Rate (Employee) SE Tax Rate

Self-Employed Health Insurance Deduction

Estimated Tax Payments (AGI $150,000)

Prior Year Tax % or Current Year Tax %

Estimated Tax Payments (AGI > $150,000)

Earnings Ceiling for Social Security

Under full retirement age The year full retirement age is reached The month full retirement age is reached, and above

Earnings Required to Earn One Quarter of Social Security Coverage

Estate and Gift Tax Applicable Exclusion Amount

Annual Gift Exclusion Amount

Adoption Credit Special Needs Child Other Children (limited to qualified expenses) Phaseout Amount

2019 $ 2,200 1,020,000

25,500 2,550,000

321,400 160,725 160,700

132,900 7.65% 15.30% 100%

100% 90% 110%

17,640 46,920 Unlimited 1,360 11,400,000 15,000

14,080 14,080 211,160 / 251,160

2020 $ 2,200

1,040,000 25,900

2,590,000

326,600 163,300 163,300

137,700 7.65% 15.30% 100%

100% 90% 110%

18,240 48,600 Unlimited 1,410 11,580,000 15,000

14,300 14,300 214,520 / 254,520

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2020 Workbook

2020 Capital Gain Rates (new capital gain brackets, a not tied to regular tax rates for 2018 to 2025)

CG = capital gain, CGI = capital gain income

CG Bracket

0% 15% 20%

Single CGI is... Over But Not Over

$0 40,000 441,450

$ 40,000 441,450

MFJ CGI is... Over But Not Over

$0 80,000 496,600

$ 80,000 496,600

MFS CGI is... Over But Not Over

$0 40,000 248,300

$ 40,000 248,300

HoH CGI is... Over But Not Over

$0 53,600 469,050

$ 53,600 469,050

a These capital gain tax brackets are indexed for inflation after 2018, using the Chained Consumer Price Index-for all Urban Consumers C-CPI-U.)

2019 Capital Gain Rates (new capital gain brackets, a not tied to regular tax rates for 2018 to 2025)

CG = capital gain, CGI = capital gain income

CG Bracket

0% 15% 20%

Single CGI is... Over But Not Over

$0 39,375 434,550

$ 39,375 434,550

MFJ CGI is... Over But Not Over

$0 78,750 488,850

$ 78,750 488,850

MFS CGI is... Over But Not Over

$0 39,375 244,425

$ 39,375 244,425

HoH CGI is... Over But Not Over

$0 52,750 461,700

$ 52,750 461,700

a These capital gain tax brackets are indexed for inflation using the Chained Consumer Price Index-for all Urban Consumers C-CPI-U.)

2019

2020

Capital Gain Rates

For Recapture Gain on Real Estate Unrecaptured IRC ?1250 Gain

25%

25%

For Most Collectibles

28%

28%

For IRC ?1202 Qualified Small Business Stock

28%

28%

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2020 Workbook

Lifetime Learning Credits

Maximum credit Phaseout Single, HoH, QW Phaseout MFJ

Hope/American Opportunity Credit

Maximum credit Phaseout Single, HoH, QW Phaseout MFJ

Earned Income Tax Credit

One child Minimum earned income for maximum EITC Maximum Amount of Credit Phaseout Amount (single and head of household) Phaseout Amount (married filing jointly)

Two Children Minimum earned income for maximum EITC Maximum Amount of Credit Phaseout Amount (single and head of household) Phaseout Amount (married filing jointly)

Three or More Children Minimum earned income for maximum EITC Maximum Amount of Credit Phaseout Amount (single and head of household) Phaseout Amount (married filing jointly)

No children Minimum earned income for maximum EITC Maximum Amount of Credit Phaseout Amount (single and head of household) Phaseout Amount (married filing jointly)

Child Tax Credit (Partially Refundable)

Child Tax Credit (Nonrefundable for Other Qualifying Dependents)

Child Tax Credit AGI Pheasout

MFJ Single, HoH, QW MFS

2019

2020

$ 2,000 58,000 68,000 116,000 136,000

$ 2,000 59,000 69,000 118,000 138,000

2,500 80,000 90,000 160,000 180,000

2,500 80,000 90,000 160,000 180,000

10,370 3,526 19,030 / 41,094 24,820 / 46,884

14,570 5,828 19,030 / 46,703 24,820 / 52,493

14,570 6,557 19,030 / 50,162 24,820 / 55,952

6,920 529

8,650 / 15,570 14,450 / 21,370

$ 2,000

500

10,540 3,584 19,330 / 41,756 25,220 / 47,646

14,800 5,920 19,330 / 47,440 25,220 / 53,330

14,800 6,660 19,330 / 50,954 25,220 / 56,844

7,030 538

8,790 / 15,820 14,680 / 21,710

$ 2,000

500

400,000 440,000 200,000 240,000 200,000 240,000

400,000 440,000 200,000 240,000 200,000 240,000

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2020 Workbook

Daycare Provider Standard Meal Allowance July 1, 2020 through June 30, 2021

Breakfast Lunch/Dinner Snack

48 States

$1.39 2.61 .78

Alaska

$2.22 4.24 1.26

Hawaii

$1.62 3.06 .91

Daycare Provider Standard Meal Allowance July 1, 2019 through June 30, 2020

Breakfast Lunch/Dinner Snack

48 States

$1.33 2.49 .74

Alaska

$2.12 4.04 1.20

Hawaii

$1.54 2.92 .87

M&IE (Meals-and-Incidental-Expense-Only) Rates for Transportation Workers for Travel Away from Home

Locality

CONUS (continental U.S.) OCONUS (outside the continental U.S.)

Oct. 1, 2018 Sep. 30, 2019

$66 71

Oct. 1, 2019 Sep. 30, 2020

$66 71

High cost areas Basic/low cost areas

High and Low Per Diem Reimbursements

Oct. 1, 2018 Sep. 30, 2019 $287 ($71 for M&IE) $195 ($60 for M&IE)

Oct. 1, 2019 Sep. 30, 2020

$297 ($71 for M&IE) $200 ($60 for M&IE)

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2020 Workbook

DEPRECIATION LIMITS FOR LUXURY VEHICLES1

Tax Year

Used Passenger Vehicles

Placed in service in 2020

1 2 3 4 or more

$10,100 a 16,100 9,700 5,760

1

New Passenger Vehicles

$10,100 a 16,100 9,700 5,760

Used Trucks and Vans

$10,100 a 16,100 9,700 5,760

New Trucks and Vans

$10,100 a 16,100 9,700 5,760

Placed in service in 2019

1 2 3 4 or more

$10,100 a 16,100 9,700 5,760

$10,100 a 16,100 9,700 5,760

$10,100 a 16,100 9,700 5,760

$10,100 a 16,100 9,700 5,760

Placed in service in 2018

1 2 3 4 or more

$10,000 b 16,000 9,600 5,760

$10,000 b 16,000 9,600 5,760

$10,000 b 16,000 9,600 5,760

$10,000 b 16,000 9,600 5,760

Placed in service in 2017

1 2 3 4 or more

$3,160 c 5,100 3,050 1,875

$3,160 c 5,100 3,050 1,875

$3,560 c 5,700 3,450 2,075

$3,560 c 5,700 3,450 2,075

Placed in service in 2016

1 2 3 4 or more

$3,160 c 5,100 3,050 1,875

$3,160 c 5,100 3,050 1,875

$3,560 c 5,700 3,350 2,075

$3,560 c 5,700 3,350 2,075

Placed in service in 2015

1 2 3 4 or more

$3,160 c 5,100 3,050 1,875

$3,160 c 5,100 3,050 1,875

$3,460 c 5,600 3,350 1,975

$3,460 c 5,600 3,350 1,975

a For passenger automobiles, vans, and light trucks placed in service in 2019 or 2020, new and used vehicles qualify for bonus depreciation, for a maximum first year depreciation of $18,100, if bonus depreciation is claimed.

b For passenger automobiles, vans, and light trucks acquired after September 27, 2017 and placed in service in 2018, new and used vehicles qualify for bonus depreciation, for a maximum first year depreciation of $18,000, if bonus depreciation is claimed.

For the same vehicles acquired before September 28, 2017 and placed in service in 2018, new and used vehicles qualify for bonus depreciation, for a maximum first year depreciation of $16,400, if bonus depreciation is claimed.

c For 2014 2017, bonus depreciation is available only for new vehicles placed in service. The maximum first-year depreciation for new passenger vehicles is $11,160 (2014 2017) and for trucks and vans is $11,460 (2014 2015) and $11,560 (2016 2017).

1. Rev. Procs. 2015-19, 2016-23, 2017-29, 2018-25, 2019-26, and 2020-37.

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2020 Workbook

SAVER'S CREDIT -- 2020 (RETIREMENT SAVINGS CONTRIBUTIONS CREDIT)

Maximum Credit

Single, MFS, HoH, QW MFJ

2019

$1,000 2,000

2020

$1,000 2,000

Credit Rate

50% 20% 10% 0%

2020 Credit Rate

MFJ AGI Over But Not Over

$0 39,000 42,500 65,000

$39,000 42,500 65,000

HoH AGI Over But Not Over

$0 29,250 31,875 48,750

$29,250 31,875 48,750

2

QUALIFIED RETIREMENT PLAN LIMITATIONS2

Single, MFS, QW AGI Over But Not Over

$0 19,500 21,250 32,500

$19,500 21,250 32,500

Contributions/Deferrals Maximum deductible employee annual retirement contribution

(401(k), 403(b), 457, SARSEP, Thrift Savings Plans) Catch-up contributions (age 50 or over)

Maximum annual deferral under SIMPLE IRA and SIMPLE 401(k) Catch-up deferral (age 50 or over)

Maximum traditional and Roth IRA annual contributions (the annual limit is lesser of 100% of taxable compensation or listed amount) Catch-up contributions (age 50 or over)

Maximum employer contribution to SEP IRA (the annual limit is lesser of 25% of compensation or listed amount)

Income limitations Maximum annual benefit for a defined benefit plan

(based on annual compensation, the annual limits may be less)

Maximum annual contribution to all defined contribution plans (the annual limit is lesser of 100% of compensation or listed amount)

Earnings threshold for highly-compensated employees

Earnings threshold for key employee in top-heavy plan

2019

$ 19,000 6,000 13,000 3,000 6,000 1,000 56,000

225,000

56,000

125,000 180,000

2020

$ 19,500 6,500 13,500 3,000 6,000 1,000 57,000

230,000

57,000

130,000 185,000

2. IRS Notice 2018-83, 2018-47 IRB 774; IRS Notice 2017-64, 2017-45 IRB 486.

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2020 Workbook

UNIFORM LIFETIME TABLE/SINGLE LIFE EXPECTANCY TABLE

This table combines the Uniform Lifetime Table and the Single Life Expectancy Table found in IRS Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs).

Single Uniform

Single Uniform

Single Uniform

Single Uniform

Age Life a

Life b Age Life a

Life b Age Life a

Life b Age Life a

Life b

10

72.8

86.2

34

49.4

62.3

58

27.0

38.7

82

9.1

17.1

11

71.8

85.2

35

48.5

61.4

59

26.1

37.8

83

8.6

16.3

12

70.8

84.2

36

47.5

60.4

60

25.2

36.8

84

8.1

15.5

13

69.9

83.2

37

46.5

59.4

61

24.4

35.8

85

7.6

14.8

14

68.9

82.2

38

45.6

58.4

62

23.5

34.9

86

7.1

14.1

15

67.9

81.2

39

44.6

57.4

63

22.7

33.9

87

6.7

13.4

16

66.9

80.2

40

43.6

56.4

64

21.8

33.0

88

6.3

12.7

17

66.0

79.2

41

42.7

55.4

65

21.0

32.0

89

5.9

12.0

18

65.0

78.2

42

41.7

54.4

66

20.2

31.1

90

5.5

11.4

19

64.0

77.3

43

40.7

53.4

67

19.4

30.2

91

5.2

10.8

20

63.0

76.3

44

39.8

52.4

68

18.6

29.2

92

4.9

10.2

21

62.1

75.3

45

38.8

51.5

69

17.8

28.3

93

4.6

9.6

22

61.1

74.3

46

37.9

50.5

70

17.0

27.4

94

4.3

9.1

23

60.1

73.3

47

37.0

49.5

71

16.3

26.5

95

4.1

8.6

24

59.1

72.3

48

36.0

48.5

72

15.5

25.6

96

3.8

8.1

25

58.2

71.3

49

35.1

47.5

73

14.8

24.7

97

3.6

7.6

26

57.2

70.3

50

34.2

46.5

74

14.1

23.8

98

3.4

7.1

27

56.2

69.3

51

33.3

45.5

75

13.4

22.9

99

3.1

6.7

28

55.3

68.3

52

32.3

44.6

76

12.7

22.0

100

2.9

6.3

29

54.3

67.3

53

31.4

43.6

77

12.1

21.2

101

2.7

5.9

30

53.3

66.3

54

30.5

42.6

78

11.4

20.3

102

2.5

5.5

31

52.4

65.3

55

29.6

41.6

79

10.8

19.5

103

2.3

5.2

32

51.4

64.3

56

28.7

40.7

80

10.2

18.7

104

2.1

4.9

33

50.4

63.3

57

27.9

39.7

81

9.7

17.9

105

1.9

4.5

a IRS Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs), pp. 45 46 (2019). b Rev. Rul. 2002-62, 2002-42 IRB 710, 712.

Column 1: Age refers to either the owner while living or the beneficiary after owner's death. Column 2: Single Life is used for a beneficiary. Column 3: Uniform Life is used by owner before death.

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