Bloomberg Tax Predicts Small 2020 Inflation Adjustments

ARLINGTON, Va., Sept. 12, 2019 /PRNewswire/ -- Bloomberg Tax & Accounting released its 2020 Projected U.S. Tax Rates report today. This report contains a detailed and comprehensive projection of inflation-adjusted amounts in the tax code based on changes in the chained Consumer Price Index (chained CPI), which were released today by the U.S. Bureau of Labor Statistics. The projections facilitate tax planning by providing early notice of the amount of tax savings that taxpayers will realize as a result of increases in deduction limits, upward adjustments to tax bracket thresholds, and increases in many other key thresholds. The full report is available at http://onb-tax.com/JG9o50w6VNO.  

The change to using chained CPI to measure cost of living adjustments was made by the 2017 Tax Cuts & Jobs Act. From 2019 to 2020, most inflation-adjusted amounts in the tax code, including the threshold dollar amounts for tax rate brackets, are projected to rise by less than 1.5%.

"We are projecting smaller increases for most inflation-adjusted amounts this year, as we expected, due in part to the use of the chained CPI to measure cost of living adjustments, and partly due to the slower rise in inflation overall," said Annabelle Gibson, practice lead for U.S. income tax and IRS procedure, Bloomberg Tax & Accounting. "Our projections help taxpayers and tax planners get a jumpstart on the 2020 tax planning season in advance of the Internal Revenue Service's publication of official 2020 inflation-adjusted amounts later this fall."

Individual Income Tax Rate Brackets

Bloomberg Tax & Accounting has projected 2020 income ranges for each tax rate bracket. Income ranges for the tax brackets for married taxpayers filing jointly and for single taxpayers are shown below. Rate brackets for other filing statuses are included in the full report.

Married Filing Jointly and Surviving Spouses

Unmarried Individuals (other than Surviving Spouses and Heads of Households)

Standard Deduction

Bloomberg Tax & Accounting has projected the following standard deduction amounts for 2020:

Alternative Minimum Tax (AMT)

Projected 2020 AMT exemption amounts are shown below.

Legislative Increase in Failure-to-File Penalty

Legislation passed in July increased the statutory amount of the penalty for failure to file a return or failure to pay tax to $330 for 2020. This new amount will be the base for future inflation adjustments.

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The information in this press release is not offered as and shall not constitute legal or tax advice.  In addition, the information in this press release should not be used or relied upon in connection with any actual transaction without the guidance of a professional tax adviser.

SOURCE Bloomberg Tax & Accounting

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