The Tax Cuts and Jobs Act of 2017 will mean change for nearly everyone in 2019.
This newsletter explains some of the tax changes that are effective for 2019. Be sure to read Tax Tips!
E-FILE is available again this year. Refunds are usually deposited into your account within 2 weeks.
2019 TAX CHANGES + REMINDERS
- All children must have a social security number.
- Personal and dependent exemptions are eliminated (see child credit rules on Tax Tips).
- Standard deduction goes from $12,000 to $12,200 (single), from $24,000 to $24,400 (married),
From $18,000 to $18,350 (HOH), add $1,650 >= 65 and single or HOH, add $1,300 >= 65 and married
|Fed Tax Rate||
|Single||0 – 9,700||9,701 – 39,475||39,476 – 84,200||84,201 – 160,725||160,726 – 204,100|
|Married||0 – 19,400||19,401 – 78,950||78,951 – 168,400||168,401 – 321,450||321,451 – 408,200|
|Head of Household||0 – 13,850||13,851 – 52,850||52,851 – 84,200||84,201 – 160,700||160,701 – 204,100|
New Rates – 35%: 204,001-510,300 (S, HOH), 408,201-612,350 (M), 37%: >510,300 (S, HOH), >612,350 (M)
- Medical Expenses are allowed if they exceed 10% of Adjusted Gross Income (AGI).
- Real Estate, State Income, Excise, and Foreign are all deductible (limited to $10,000)
- State and Local Sales Taxes can be substituted for State Income Tax
- Mortgage – fully deductible for first and second home up to $1,000,000 in acquisition debt (pre-2018), $750,000 (after 12/31/2017)
- Home Equity – deductible if used for home improvements
- Mortgage Insurance - not deductible
- Points – partially or fully deductible.
- Investment – fully deductible up to investment income.
- Contributions are fully deductible for those who itemize. Cancelled checks or receipts are required for all donations and written substantiation is needed from charitable organizations for cash gifts over $250.
- Miscellaneous Deductions are NOT allowed. They used to include employee business expenses, union dues, education, work tools, uniforms, tax and investment fees.
- Gains are fully taxable. Losses can be used to reduce gains to zero. An additional $3,000 in losses can be used to reduce income. Make trades by 12/31/19.
- Child Care Credit for children under 13 requires listing the name, address, and SS# or 04# of the person paid. $3,000/child (2 children maximum)
- Mileage Allowance is 58 cents per business mile, 14 cents per charitable mile, and 20 cents per medical and moving mile.
- 20% business pass thru deduction (lots of rules)
Paul A. Wacks, EA, MST