Bloomberg Projects Inflation-Adjusted Tax Rates for 2020
Projected 2020 tax rates and brackets have been released by Bloomberg Tax & Accounting.
The company’s annual report on project tax rates includes inflation-adjusted estimates to help companies and individuals plan tax strategy. The report is based on changes in the chain consumer price index reported by the US Bureau of Labor Statistics on September 12.
Bloomberg says the projections are intended to support consumer tax planning with a forecast of changed tax liability based on inflation-adjusted thresholds to deduction limits, tax brackets, and other factors.
Bloomberg Tax & Accounting says tax brackets are set to rise by less than 1.5% in 2020.
How does this affect you?
Let’s consider the 22% tax bracket. Last year, taxpayers filing under the married-filing-jointly and surviving-spouse categories paid 22% if their taxable income feel between $78,951 and $168,400. Bloomberg T&A says in the coming year, the 22% rate will encompass incomes from $80,251 to $171,050.
A similar bracket change applies for unmarried individuals. The 22% rate applied to incomes of $39,476 to $84,200. Bloomberg says we can expect the revised bracket to apply to taxable incomes of $40,126 to $85,525.
The IRS’s standard deduction and exemption amounts for the alternative minimum tax will also be adjusted for inflation. Bloomberg Tax & Accounting reports that the new figures will look like this:Projected 2020 Standard Deduction
- Married filing jointly/surviving spouses - $24,800
- Head of household - $18,650
- All other taxpayers - $12,400
- Married filing jointly/surviving spouse - $113,400
- Unmarried individuals other than surviving spouses - $72,900
- Married individuals filing separate returns - $56,700
- Estates and trusts - $25,400
In addition, Congress raised the failure-to-file and failure-to-pay-tax penalties to $330 for this year. The amount will be adjusted for inflation in future years.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
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