The Internal Revenue Service (IRS) recently announced changes to tax rate schedules and certain tax provisions to adjust for inflation in tax year 2020. The standard deduction for taxpayers who are married filing jointly will increase to $24,800; for taxpayers who are single or married filing separately, the deduction will increase to $12,400; and for taxpayers who are heads of households, the deduction will increase to $18,650. The Alternative Minimum Tax exemption amount for tax year 2020 will increase to $72,900 and begin to phase out at $518,400 (for married couples filing jointly, these amounts increase to $113,400 and $1,036,800, respectively).
There will continue to be no limitation on itemized deductions, and the annual gift exclusion will remain the same as in 2019, namely $15,000.
The failure-to-file penalty for returns due after the end of 2019 will increase to $330, per the Taxpayer First Act of 2019.
To read the full IRS press release on these changes, click here.