A 20/20 View of the 2020 Tax Season

Did you know that pigs are known for having great panoramic vision? Unfortunately, this decreases their ability to calculate distance ahead of them. While the April 15 tax deadline may seem far away, it’s a good idea to prepare now. Thankfully, Professor Pig wisely used his 2019 FSA dollars for new glasses! Read on for a clear view of the 2020 tax season to ensure you’re prepared for the changes ahead.

Scope out the Deadlines

The IRS began accepting and processing 2019 tax returns for those filing individually on January 27, 2020. But don’t worry, you still have until April 15, 2020, to file.

If you need to file an extension, you must do so by the deadline, as it falls in the middle of the week this year. There are exceptions for anyone serving in the Armed Forces and in a combat zone or currently hospitalized for a combat-related injury.

Focus on the Brackets

The rates for capital gains did not change this year, but the brackets for those rates were adjusted. The higher income limits in 2020 to account for inflation.

Remember that the following brackets apply to your taxable income, or the amount left over after standard or itemized deductions and other adjustments. Most taxpayers won’t pay more than 15%. IRS Free File is a terrific option for those that made less than $69,000.

 

	2019 Tax Brackets	2019 Thresholds	2020 Tax Brackets	2020 Thresholds
Single Filing	10%	$0 - $9,525	10%	$0 - $9,875
	12%	$9,526 - $38,700	12%	$9,876 - $40,125
	22%	$38,701 - $82,500	22%	$40,126 – $85,525
	24%	$82,501 - $157,500	24%	$85,526 - $163,300
	32%	$157,501 - $200,000	32%	$163,301 - $207,350
	35%	$200,201 - $500,000	35%	$207,350 - $518,400
	37%	More than $500,000	37%	More than $518,400
Married Filing Jointly	10%	$0 - $19,050	10%	$0 - $19,750
	12%	$19,051 - $77,400	12%	$19,751 - $80,250
	22%	$77,401 - $165,000	22%	$80,250 -$171,050
	24%	$165,001 - $315,000	24%	$171,051 - $326,600
	32%	$315,001 - $400,000	32%	$326,601 – $414,700
	35%	$400,001 - $600,000	35%	$414,701 - $622,050
	37%	More than $600,000	37%	More than $622,050

In cases where taxable income exceeds the threshold set for the 37% ordinary tax rate, a 20% tax rate applies.

Adjusting the Standard Deduction

For married couples filing jointly, the standard deduction is now $24,000, a $400 increase from last year. Married couples filing separately now deduct $12,200, which is $200 more than last year. The deduction for head of household increased $350 to $18,350, and those filing as single saw an increase of $200 to $12,200.

Reveal Your Refund

Generally speaking, the majority of refunds are received within three weeks of when they were submitted. You can check your status with the IRS’s handy tracking tool. To ensure you receive your refund as quickly as possible, be sure to set up direct deposit.

Your prescription for 2020 is to lay the groundwork for an even better refund next year by depositing your 2019 refund into a variety of Smarty Pig accounts. Giving each of your goals a boost will help you reach your goals in record time!

 

 

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