There are quite a few things on the state and federal level that impacts Virginia taxpayers. Although nothing overwhelming, there a few considerations you should look to see if they have an impact on you before April rolls around. Check them out below:
The Standard Deduction and Marginal Tax Have Gone Up
While it’s nothing to write home about, the standard deduction for taxes has gone up. According to Nerdwallet, as it currently stands, the normal deduction has increased by $200 for individuals to now $12,400, with married couples seeing an increase from $24,400 to $24,800. A nominal change to adjust for inflation, the bigger percentage change has come with marginal tax rates, which as noted by Accounting Today are as follows:
- 10 percent for individuals that earn less than $9,875 ($19,750 for married couples filing jointly)
- 12 percent for individuals that earn more than $9,875 ($19,750 for married couples filing jointly)
- 22 percent for individuals that earn more than $40,125 ($80,250 for married couples filing jointly)
- 24 percent for individuals that earn more than $85,525 ($171,050 for married couples filing jointly)
- 32 percent for individuals that earn more than $163,300 ($326,600 for married couples filing jointly)
- 35 percent for individuals that earn more than $207,350 ($414,700 for married couples filing jointly)
Gifts Have Gotten Bigger
One significant change in the tax code has been what’s considered a non-taxable gift. According to CNBC, individuals can transfer up to $11.58 million free of estate and gift taxes, which is a substantial bump. Regardless if you’ve been able to utilize this rule before, the height of that overhead is worth noting if you were planning on giving a gift, especially as a lump sum cash payment.
Retirement Has Grown
Another change to consider for 2020 is how much retirement has gone up. Although it’s not a massive margin, most plan contributions have gone up around $500, which is worth noting if you’re at the beginning of your retirement journey bump. And if you haven’t started saving, there’s a slight bit of encouragement there to get started.
…individuals can transfer up to $11.58 million free of estate and gift taxes, which is a substantial bump.
Increases In Virginia Deduction
For Virginia residents, the standard deduction has increased to $4,500 for individuals as well as $9,000 for married couples. Staying competitive amongst states, Virginia’s standard deduction saw an increase practically of 50 percent.
Don’t Forget To Keep It Clean
Finally, a new piece of the Virginia tax code you should bear in mind is that sales tax on hygiene products has decreased. While this is ultimately helpful for those trying to get back on their feet, it’s worth noting since it practically impacts everyone. As almost all of us use them, the easement helps decrease what’s spent on taxes for keeping ourselves clean and presentable.