The following table provides some important federal tax information for 2020, as compared with 2019. Some of the dollar amounts are unchanged and some changed only slightly due to inflation.

Social Security/ Medicare

2020

2019

Social Security Tax Wage Base

$137,700

$132,900

Medicare Tax Wage Base

No limit

No limit

Employee portion of Social Security

6.2%

6.2%

Employee portion of Medicare

1.45%

1.45%

Individual Retirement Accounts

2020

2019

Roth IRA Individual, up to 100% of earned income

$6,000

$6,000

Traditional IRA Individual, up to 100% of earned Income

$6,000

$6,000

Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older

$1,000

$1,000

Qualified Plan Limits

2020

2019

Defined Contribution Plan limit on additions on Sections 415(c)(1)(A) $57,000 $56,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) $230,000 $225,000
Maximum compensation used to determine contributions $285,000 $280,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $19,500 $19,000
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older $6,500 $6,000
SIMPLE deferrals (Section 408(p)(2)(A)) $13,500 $13,000
SIMPLE additional “catch-up” contributions for employees age 50 and older $3,000 $3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B)) $130,000 $125,000
Compensation defining key employee (officer) $185,000 $180,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c)) $600 $600
Driving Deductions 2020 2019
Business mileage, per mile 57.5 cents 58 cents
Charitable mileage, per mile 14 cents 14 cents
Medical and moving, per mile 17 cents 20 cents
Business Equipment 2020 2019
Maximum Section 179 deduction $1,040,000 $1,020,000
Phase out for Section 179 $2.59 million $2.55 million
Transportation Fringe Benefit Exclusion 2020 2019
Monthly commuter highway vehicle and transit pass $270 $265
Monthly qualified parking $270 $265
Standard Deduction 2020 2019
Married filing jointly $24,800 $24,400
Single (and married filing separately) $12,400 $12,200
Heads of Household $18,650 $18,350
Domestic Employees 2020 2019
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $2,200 $2,100
Kiddie Tax 2020 2019
Net unearned income not subject to the “Kiddie Tax” $2,200 $2,200
Estate Tax 2020 2019
Federal estate tax exemption $11.58 million $11.4 million
Maximum estate tax rate 40% 40%
Annual Gift Exclusion 2020 2019
Amount you can give each recipient $15,000 $15,000

Contact your SSB tax advisor if you have any questions.