2020 annual limits recap

January 17, 2020
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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.