2020 Tax Year Guide
This is for tax year 2020 (filed in April 2021). See below for 2021.

Highlights
- Tax brackets increase with inflation.
- No change in IRA contribution limits.
- Multiple unique aspects due to COVID.
Tax Charts
2020 Tax Bracket | Single Income | Married Income |
---|---|---|
10% | $0 to $9,875 | $0 to $19,750 |
12% | $9,875 to $40,125 | $19,750 to $80,250 |
22% | $40,125 to $85,525 | $80,250 to $171,050 |
24% | $85,525 to $163,300 | $171,050 to $326,600 |
32% | $163,300 to $207,350 | $326,600 to $414,700 |
35% | $207,350 to $518,400 | $414,700 to $622,050 |
37% | $518,400+ | $622,050+ |
2020 Capital Gains | Single | Married |
---|---|---|
0% | $0 to $40,000 | $0 to $80,000 |
15% | $40,000 to $441,450 | $80,000 to $496,050 |
20% | $441,450+ | $496,050+ |
2020 Additional Taxes | Single | Married |
---|---|---|
Social Security Tax Cap (6.2%) | $137,700 and under | $0 to $80,000 |
Net Investment Income (3.8%) | $200,000+ MAGI | $250,000+ MAGI |
2020 Retirement Contribution Limits | Under Age 50 | Age 50+ |
---|---|---|
IRA | Up to $6,000 | (+$1,000) |
401(K) or TSP | Up to $19,500 | (+6,500) |
SEP IRA or Solo 401(K) | Up to $57,000 | (+6,500) |
2020 Standard Deduction | Single | Married |
---|---|---|
Amount | $12,400 | $24,800 |
New & COVID Related
- Unemployment compensation is taxable (will receive a 1099-G form), stimulus check are not taxable.
- Unless you're self-employed, you can not deduct home office expenses.
- Previous year IRS refund interest payment is taxable.
- Flexible Spending Accounts - Can carry over funds from 2020 to 2021, and 2021 to 2022.
- Charitable deduction (see below).
Deductions & Credits Overview
- (New) Charitable deduction - Up to $300 non-itemized or up to 100% of AGI itemized for 2020 & 2021.
- Medical expense deduction - Established permanent threshold of 7.5% of AGI.
- Recovery Rebate Credit - For those who meet qualifications based on 2020 income but did not receive a stimulus check for $1,200 this year (see breakout section). Non-taxable.
- Child Tax Credit - $2,000/child tax credit (income under $200,000/$400,000).
- Self-employed deductions - Multiple.
Low Income
- Earned Income Tax Credit (EITC) - Income under $56,844.
- Saver's Credit - Income under $32,500/$65,000.
Charitable Deduction Overview
New for 2020 (and 2021) is the charitable deduction allowance.
Non-itemizers can take a charitable deduction of up to $300 on taxable income (but not Adjusted Gross Income (AGI) which is used for certain Roth IRA, investment surtax, and Medicare premium thresholds).
Itemizers can deduct up to 100% of AGI.

Recovery Rebate Credit Overview
The federal government sent out $1,200/$2,400 checks earlier this year in a tax credit advance, so most people have already received this amount directly.
However, if you didn't receive the $1,200 check but your 2020 income is qualifying you can still receive this.
- $150,000 if married and filing a joint return
- $112,500 if filing as head of household or
- $75,000 for eligible individuals using any other filing statusYour payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

IRA Limits
Traditional IRA
This is the limit for how much you can get a deduction for contributing to a traditional IRA. You can still contribute above this point, it just won't be tax deductible.
2020 Traditional IRA | Single | Married |
---|---|---|
Deduction Phase-out | $65,000 to $75,000 | $104,000 to $123,000 |
Non-deductable | Any income | Any income |
Note: If you or your spouse are not covered by a workplace retirement plan additional rules apply.
Roth IRA
This is the limit for who can contribute to a Roth IRA. If you are above this, you can do a "backdoor" contribution by contributing to a Traditional IRA and converting it to a Roth (no limit).
2020 Roth IRA | Single | Married |
---|---|---|
Direct Contribution Phase-out | $124,000 to $139,000 | $196,000 to $206,000 |
Backdoor/Conversion | Any income | No income |
Note: If you wish to pursue a backdoor contribution and have other/previous Traditional IRA assets there are additional rules.
Military & Veterans
Free Tax services
- IRS Free File (income under $69,000)
- Military OneSource (any)
- Volunteer Income Tax Assistance program (income under $56,000)
Special Rules to Remember
- Combat zone pay is non-taxable
- VA Disability Benefits are not included in gross income

State Taxes
There is too much individual variability to cover here, but as a point of reference here is a graphic courtesy of our friends at Visual Capitalist.


Sources

