![]() The ability to deduct mortgage insurance premiums originally expired in 2017, but Congress revived it with the Further Consolidated Appropriations Act of 2020, making it available for 2018 through 2020. Mortgage insurance premiums are still deductible You typically have until the tax filing deadline to make IRA contributions for 2020. The deduction phases out for single filers with AGIs between $65,000 and $75,000 ($104,000 to $124,000 for married couples filing jointly) if covered by a workplace retirement plan. The deduction phaseouts for contributions to traditional IRAs are a little more generous in 2020. For 2020, contributions phase out at an adjusted gross income (AGI) of $124,000 to $139,000 for single filers and $196,000 to $206,000 for couples. ![]() However, the income limit to contribute to a Roth IRA increased. The contribution limit for traditional and Roth IRAs remained at $6,000 (plus an additional $1,000 for taxpayers age 50 and up). People age 50 or older can make an additional "catch-up" contribution up to $6,500. The maximum 401k contribution for 2020 is $19,500. Some retirement account contribution limits increased for 2020 as well. ![]() You have up to three years to put the money back in your retirement account and undo the distribution's tax consequences. The 10% early withdrawal penalty is waived for up to $100,000 of COVID-19-related payouts.In a normal tax year, RMDs are required to be made and typically increase taxable income. Seniors may skip their required minimum distributions (RMDs) in 2020 without penalty.Here are the most significant retirement plan provisions that may affect your 2020 tax return: The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in March of 2020. The withdrawn amount may still be taxable income. Taxpayers who have a baby or adopt a child can withdraw up to $5,000 from an IRA or 401(k) without having to pay the 10% penalty for early withdrawals.Owners of traditional IRAs can now make contributions past the age of 70½.This change only applies to account owners who turn 70½ in 2020 or later. The beginning age for taking required minimum distributions (RMDs) rose from 70½ to 72.The Setting Every Community Up for Retirement Enhancement (SECURE) Act went into effect on January 1, 2020. Two recent pieces of legislation made changes to the tax rules for retirement savings. Changes to retirement savings rules and limits For single filers and heads of household, the additional standard deduction is $1,650. Married taxpayers age 65 or older get an additional $1,300 per person for each spouse age 65 or older. ![]()
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