2020 Tax Changes

Here's an overview of what's changing--and what's not--in 2020.

  • Estates of decedents who die during 2020 have a basic exclusion amount of $11.58 million, up from a total of $11.4 million for estates of decedents who died in 2019.
     
  • An individual taxpayer may leave $11.58 million to heirs with no federal or gift taxes due. A married couple will be able to leave $23.16 million.
     
  • The gift tax exclusion hasn't changed. It remains at $15,000, the same as 2019.
     
  • The standard deduction for married filing jointly rises to $24,800 for tax year 2020, up $400 from the prior year.
     
  • For single taxpayers and married individuals filing separately, the standard deduction rises to $12,400 in for 2020, up $200, and for heads of households, the standard deduction will be $18,650 for tax year 2020, up $300.
     
  • The Alternative Minimum Tax exemption amount for tax year 2020 is $72,900 and begins to phase out at $518,400 ($113,400 for married couples filing jointly for whom the exemption begins to phase out at $1,036,800).The 2019 exemption amount was $71,700 and began to phase out at $510,300 ($111,700, for married couples filing jointly for whom the exemption began to phase out at $1,020,600).

Estate and Gift Tax Limits for 2020

For tax year 2020, the top tax rate remains 37% for individual single taxpayers with incomes greater than $518,400 ($622,050 for married couples filing jointly). The other rates are:

  • 35%, for incomes over $207,350 ($414,700 for married couples filing jointly)
  • 32% for incomes over $163,300 ($326,600 for married couples filing jointly)
  • 24% for incomes over $85,525 ($171,050 for married couples filing jointly)
  • 22% for incomes over $40,125 ($80,250 for married couples filing jointly)
  • 12% for incomes over $9,875 ($19,750 for married couples filing jointly)

If you're a Takacs McGinnis client and you're wondering if any of these changes will affect your estate plan, just give our office a call.

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