The tax filing season has finally begun as of early February. If you’re one of those folks that like to file early and get everything over with, it is your time to shine. For 2020, there are only two tax changes that you should be aware of. The first is the standard deduction and the second is the tax brackets increase.
The standard deduction has been increased to $12,400 for single filers which is a $200 increase from the last year. As far as the federal tax brackets go, the percentage of the increase is pretty much the same as the standard deduction.
The standard deduction increased by 1.5% while almost all tax brackets saw an increase of 1.6%. The standard deduction for 2020 is
- $12,400 for Single and Separate Filers
- $24,800 for Married Joint Filers
- $18,650 for Head of Household
- $24,800 for Qualified Widows and Widowers
The updated tax brackets can be seen in this post.
There are a few things that you might want to know beforehand though. Most of the changes that Tax Cuts and Jobs Act of 2017 brought are going to be effective till 2025. This also includes the child tax credit amount which is $2,000 for 2020 and $1,400 of it is refundable. Whether there will be a change in 2021 for the tax code that the U.S. uses or not, our posts will be updated.
There might be some big changes for 2021 as almost all Democrat candidates for the presidency is talking about it. But for this year, there isn’t anything in particular that will affect your tax bill. In conclusion, everything will be the same as last year if your income hasn’t shifted significantly.