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January / February 2020

Key Retirement and Tax Numbers for 2020

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key adjustments for 2020.

Employer retirement plans

  • Employees who participate in 401(k), 403(b), and most 457 plans can defer up to $19,500 in compensation in 2020 (up from $19,000 in 2019); employees age 50 and older can defer up to an additional $6,500 in 2020 (up from $6,000 in 2019).
  • Employees participating in a SIMPLE retirement plan can defer up to $13,500 in 2020 (up from $13,000 in 2019), and employees age 50 and older can defer up to an additional $3,000 in 2020 (the same as in 2019).

IRAs

The combined annual limit on contributions to traditional and Roth IRAs is $6,000 in 2020 (the same as in 2019), with individuals age 50 and older able to contribute an additional $1,000. For individuals who are covered by a workplace retirement plan, the deduction for contributions to a traditional IRA phases out for the following modified adjusted gross income (MAGI) ranges:

2019 2020
Single/head of household (HOH) $64,000 - $74,000 $65,000 - $75,000
Married filing jointly (MFJ) $103,000 - $123,000 $104,000 - $124,000
Married filing separately (MFS) $0 - $10,000 $0 - $10,000

Note:  The 2020 phaseout range is $196,000 - $206,000 (up from $193,000 - $203,000 in 2019) when the individual making the IRA contribution is not covered by a workplace retirement plan but is filing jointly with a spouse who is covered.

The modified adjusted gross income phaseout ranges for individuals to make contributions to a Roth IRA are:

2019 2020
Single/HOH $122,000 - $137,000 $124,000 - $139,000
MFJ $193,000 - $203,000 $196,000 - $206,000
MFS $0 - $10,000 $0 - $10,000

Estate and gift tax

  • The annual gift tax exclusion for 2020 is $15,000, the same as in 2019.
  • The gift and estate tax basic exclusion amount for 2020 is $11,580,000, up from $11,400,000 in 2019.

Standard deduction

2019 2020
Single $12,200 $12,400
HOH $18,350 $18,650
MFJ $24,400 $24,800
MFS $12,200 $12,400

Note:  The additional standard deduction amount for the blind or aged (age 65 or older) in 2020 is $1,650 (the same as in 2019) for single/HOH or $1,300 (the same as in 2019) for all other filing statuses. Special rules apply if you can be claimed as a dependent by another taxpayer.

Alternative minimum tax (AMT)

2019 2020
Maximum AMT exemption amount
Single/HOH $71,700 $72,900
MFJ $111,700 $113,400
MFS $55,850 $56,700
Exemption phaseout threshold
Single/HOH $510,300 $518,400
MFJ $1,020,600 $1,036,800
MFS $510,300 $518,400
26% rate on AMTI* up to this amount, 28% rate on AMTI above this amount
MFS $97,400 $98,950
All others $194,800 $197,900
*Alternative minimum taxable income

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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).  Insurance products are offered through LPL or its licensed affiliates. Landmark Credit Union and Landmark Investment Center are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Landmark Investment Center, and may also be employees of Landmark Credit Union.  These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Landmark Credit Union or Landmark Investment Center.  Securities and insurance offered through LPL or its affiliates are:

 

Not Insured by NCUA or Any Other Government Agency

Not Landmark Credit Union Guaranteed

Not Landmark Credit Union Deposits or Obligations

May Lose

Value

 

 LPL Financial office located at 2775 S. Moorland Rd., New Berlin, WI 53151 (262) 796-4515.

Prepared by Broadridge Advisor Solutions Copyright 2020.