Neil &  Company CPAs, PC

A Professional Corporation

1184 North 15th Street, Bozeman, MT 59715

 

Phone: 406-587-9239

 

February 2020

Big Income, Big Taxes

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The IRS issued a final ruling explaining how to qualify for a real estate income safe harbor to receive the Qualified Business Income (QBI) deduction. You will need to make this safe harbor determination annually.


Pay Now
The alternative minimum tax (AMT), will see its exemption amount rise in 2020 to $72,900 and begin to phase out at $518,400 ($113,400 for married couples filing jointly and phasing out starting at $1,036,800). In 2019, the exemption was $71,700 and began to phase out at $510,300 ($111,700 for married couples and phasing out starting at $1,020,600). Also in 2020, you’ll pay Social Security tax on up to $137,700 of taxable income, up from $132,900.


Pay Later
Another provision, the federal estate tax, will be your heirs’ concern after you pass. The basic exclusion amount in 2020 is $11,580,000 per taxpayer (double if filing taxes jointly), after which estate taxes begin. That’s up slightly from 2019, when the exemption was $11,400,000.


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