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What are tax changes for 2020?
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Here are a few of the tax changes affecting most people in tax year 2020:
- The IRS is raising the standard deduction to $12,400 for individuals (from $12,200) and to $24,800 for married joint filers (from $24,400).
- Many deduction amounts remain the same as for 2019, such as medical and dental expenses, state and local taxes, and the percentage limit for charitable cash donations made to public charities.
- Concerning IRAs, the beginning age for taking required minimum distributions (RMDs) rises from 70½ to 72. (This change only applies to account owners who turn 70½ after 2019, so you still must take your first RMD by April 1, 2020, if you turned 70½ in 2019.)
- Owners of traditional IRAs can make contributions past the age of 70½ starting in 2020.
- Folks having a baby or adopting a child can now take payouts from IRAs and 401(k)s of up to $5,000 without having to pay the 10% fine for pre-age-59½ withdrawals.
These are changes that affect the most people. Keep in mind that Congress still has a lot of time to make changes.
