· For 2019, the standard deduction for a single individual is $12,200 and for a married couple is $24,400. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes) AND real estate taxes limited to $10k per year, mortgage interest, charitable contributions, and medical expenses in excess of 7.5% of income.
· Starting in 2018, personal exemptions are no longer deductible.
· The maximum earnings subject to social security taxes is $137,700 for 2020, up from $132,900 in 2019.
· The standard mileage rate is $.58 per business mile as of January 1, 2019, up from $.545 for 2018.
· The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $19,500 in 2020, up from $19,000 in 2019. And if you’ll be 50 or older by December 31st, you can contribute an extra $6,500 into your 401(k) or 403(b) account this year, up from and $6,000 in prior years.
The maximum annual contribution to your IRA is $6,000 in 2019 and 2020, up from $5,500 for 2015 through 2018. And if you turn 50 by December 31st, you can contribute an extra $1,000 that year. You have until April 15, 2020 to make your 2019 IRA contributions.