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Professional Resources

New for Tax Year 2019

Tax Brackets

The income tax brackets for 2019 is a bit wider than for 2018 due to inflation during the 12-month period (September 2017 -August 2018) used to figure the adjustments. Tax rates do not change.

Standard Deduction

The 2019 standard deductions increase slightly. Married couples will get $24,400 plus $1,300 for each spouse age 65 or older. Singles claim increase to $12,200 and if 65 or order will receive $13,850. Household heads will get $18,350 plus $1,650 once they reach age 65.

Capital Gains

Tax rates on long-term capital gains and qualified dividends remain the same. However, the income thresholds to qualify for the various rates go up for 2019.

Estates & Trusts

The lifetime estate and gift tax exemption rises to $11,400,000 and $22,800,000 for couples if portability is elected by filing Form 706 after the death of the spouse who passes away first. The estate tax rate remains the same at 40%.

Preparers

Preparers must document how they determined that a taxpayer’s head-of-household filing status was valid.

Retirement

Many important dollar limits on IRAs and retirement plans are higher for 2019. This includes the maximum 401(k) contribution increase to $19,000 (those born before 1970 can contribute an extra $6,000).

Minimum Tax

AMT exemptions increase to $111,700 for couples and $71,700 for both singles and heads of household.

Health Care

The TCJA repealed the fines under Obamacare’s individual mandate for post-2018 years. (This doesn’t apply for 2018 returns filed in 2019.)

The income levels to qualify for the health premium credit in 2019 will go up. The credit is available for those with household incomes ranging from 100% to 400% of the federal poverty level; 12,140 to $48,560 for singles; and $25,100 to $100,400 for a family of four, who buy health insurance through one of the exchanges.

Medicals

The annual cap on deductible contributions to HSAs will rise to $3,500 for self-only coverage and $7,000 for account owners with family coverage.

The threshold for deducting medical expenses on Schedule A jumps from 7.5% of AGI income to 10%, beginning with 2019 returns filed in 2020.

Limits on deducting long-term-care premiums are generally higher in 2019.

Alimony

Alimony paid under post-2018 divorce agreements is not deductible.