2020 Tax Season: Changes in Federal, NJ Rules You Should Know
There are many changes in tax laws this 2020 filing season that taxpayers need to be aware of, according to professionals.
Ralph Albert Thomas, executive director and CEO of the New Jersey Society of Certified Public Accountants, says one example is that the total state and local tax deduction on the federal level remains at $10,000 but New Jersey increased the deduction for property taxes to $15,000.
And homeowners can deduct interest on mortgage and insurance debt up to $750,000 this year, down from a million last year, plus up to $100,000 in home equity debt.
Another category that bears attention are medical expense deduction. Individuals need to keep track of their unreimbursed medical expenses. As of 2019, for federal purposes, you can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
"So, for example, a person who has an adjusted gross income of $50,000, and $5,000 in medical expenses would be able to deduct about $1,250 of those medical
expenses," he explained.
Also, there's no longer a penalty on your federal return for not having individual health insurance.
In 2019, New Jersey workers were taxed only on their first $34,000 in wages for paid family leave and temporary disability. In 2020, he said, they will be taxed on their first $131,000 in wages
There are many other changes. Thomas says a qualified CPA can help, both this year and in future years "because it's never too early to start planning for next year."