2020 Tax Brackets and How Much You Can Save for Retirement

If you want to stash away more money for retirement in 2020, the Internal Revenue Service (IRS) recently announced that the contribution limits for some popular retirement accounts have increased.april 15 tax day calendar

Also experiencing a change for 2020 are the IRS tax rate tables and standard deductions.

Let’s take a look at the retirement account changes first.

Four Things You Need to Know About Filing Estimated Taxes

The gig economy continues to expand. Workers, who are freelancers or independent contractors, now number roughly 57 million, which is about half of the entire working population.woman worried about money

Gig workers need to understand their responsibility to the Internal Revenue Service. Without employers to withhold taxes from their paychecks, gig workers must calculate their own payments to the IRS.

Widow’s Penalty Pitfall

Compared to past joint tax return filing with their deceased spouse, a surviving spouse may land in a higher marginal tax bracket – referred to as the “widow’s penalty.” Unfortunately, the Tax Cuts and Jobs Act (TCJA) has made the widow’s penalty more severe in many instances.

With this in mind, clients, even in their 70s or 80s, may consider greater traditional IRA withdrawals or Roth IRA conversions as a means to take advantage of preferable marginal tax rates. It is important to act while both spouses are alive.

The Tax Cuts and Job Act of 2017: What It May Mean for You

After prolonged negotiations between both houses of Congress, significant federal tax reform was signed into law by the President in the final week of 2017. What began as a Republican‐led blueprint for a simplified tax system in late 2016 became a 500+ page bill in its final form. The new tax laws will affect the vast majority of individuals and businesses through revised tax rates, as well as some noteworthy changes to deductions.