What’s new in 2019 for the Tax Cuts and Jobs Act
In 2017 the Tax Cuts and Jobs Act (TCJA) was enacted, producing the biggest tax law changes in the last 30 years. For taxpayers preparing their 2019 tax return, it will help understanding the changes from the Tax Cuts and Jobs Act.
Tax rates and brackets adjusted
For tax year 2019, there are seven tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The tax brackets adjusted for inflation are:
Standard deductions increased
Standard deductions for single taxpayers and married filing separately increased by $200 to $12,200. For married taxpayers filing jointly, the standard deduction increased by $400 to $24,400, and for heads of households the amount increased by $350 to $18,350.
In 2019, the standard deduction for each filing status is: Single……………………………………………..$12,200 …….(up from $12,000 in 2018) Married filing jointly. Widow(er) $24,400 (up from $24,000 in 2018) Married filing separately …………..$12,200 …….(up from $12,000 in 2018) Head of household……………………………….$18,350 …….(up from $10,000 in 2018)
Some credits and deductions changed
Few deductions and credits changed for 2019. The adjusted gross income amount used to determine the Lifetime Learning Credit is $116,000, $2,000 higher than in 2018. Foreign Earned Income Exclusion is up $2,000 from 2018 to $105,900 for the 2019 tax year. Medical and Dental Expenses increased to 10%, up from 7.5% in 2018. Income limits for the Saver’s Credit have increased to $64,000 for those married filing jointly, $48,000 for heads of household, and $32,000 for single taxpayers and those married filing separately.
Get your taxes done by a professional
The tax code continues to be complicated, regardless of the many changes done to simplify it.
Most taxpayers are opting to apply the standard deduction rather than itemized deduction method on their tax return, mostly because it is simpler, however it isn’t straight forward.
That’s why every year more taxpayers choose to work with a professional, there are many situations where a single missed deduction could cost a taxpayer much more than a pro’s fee.
If you want to work with a trustworthy tax professional in your area, Freedom Services can help you. Our tax experts have a thorough understanding of the tax code, and how it can affect your tax return. Talk to and let us help you get the maximum return available to you.