2020 annual limits recap

Stay on top of your individual and business limits and deductions for 2020 with this recap.

Standard mileage rates effective Jan. 1, 2020:

• 57.5 cents per mile driven for business use (half cent decrease from 2019)
• 17 cents per mile driven for medical or moving purposes (3 cent decrease from 2019)
• 14 cents per mile driven in service of charitable organizations

Social Security and Medicare

• Social Security wage base (taxable maximum) is $137,700
• Cost of Living Adjustment (COLA) stayed the same as 2019 with a 7.65% rate for employees and 15.3% rate for self-employed individuals
• Additional Medicare tax limit for wages in excess of $200,000 remains 0.9%

Retirement

• Traditional and Roth IRA contribution limit is $6,000 ($7,000 for ages 50 and older)
• 401(k) plan deferral limit is $19,500 (an additional $6,500 is permitted for ages 50 and older)
• SIMPLE IRA deferral limit is $13,500 (an additional $3,000 is permitted for ages 50 and older)

Health accounts

• Health Savings Account (HSA) limit is $3,550 for individuals, $7,100 for families, and those over 55 may contribute an additional $1,000
• Flexible Spending Account (FSA) limit is $2,750

Gift tax exclusion

• Annual gift tax exclusion remains unchanged at $15,000

Depreciation

• First year bonus depreciation is 100% as a result of the Tax Cuts and Jobs Act (TCJA) until 2023
• Section 179 depreciation federal maximum is $1,000,000 up to $2,500,000

For questions about these limitations, contact your Goering and Granatino team member.

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Frank Granatino, Partner

Frank is a graduate of Missouri State and a CPA, but moreover, he is a problem solver and combines his deep knowledge and understanding of the industry and finds ways to do things faster and more efficiently for his clients. Frank has a disarming demeanor, but will roll-up his sleeves and help get the job done.
 
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