2019 Tax Law Changes

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2019 Tax Law Changes

2019 - Standard deduction

Asked Monday, December 24, 2018 by an anonymous user
The standard deduction amounts will increase to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly and surviving spouses.

For 2019, the additional standard deduction amount for the aged or the blind is $1,300. The additional standard deduction amount increases to $1,650 for unmarried taxpayers.

For 2019, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,100 or the sum of $350 and the individual’s earned income.
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2019 Tax Law Changes

2019 - Alternative minimum tax (AMT) exemption amounts

Asked Monday, December 24, 2018 by an anonymous user
The alternative minimum tax (AMT) exemption amounts are adjusted for inflation. Here’s what those numbers look like for 2019:

Individual = $71,700
Married Filing Jointly = $111,700
Married Filg Separately = $55,850
Estates and Trusts = $25000
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2019 Tax Law Changes

2019 - Ordinary Income Tax Rates

Asked Monday, December 24, 2018 by an anonymous user
For 2019, the tax bracket amounts have been indexed for inflation.

For tax years beginning after December 31, 2017 and before January 1, 2026, seven brackets will apply to individuals: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

No change has been made to the filing statuses that apply to individuals.
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2019 Tax Law Changes

2019 - Itemized deductions-State Property & Income tax Limitation

Asked Monday, December 24, 2018 by an anonymous user
The combination of residential property taxes and Income or sales taxes continues to be capped at $10,000.

Property taxes remain fully deductible for taxpayers in a business or for-profit activity, so taxes paid on rental realty can be taken in full on Schedule E.
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2019 Tax Law Changes

2019 - Itemized deductions- medical expenses

Asked Monday, December 24, 2018 by an anonymous user
For tax years beginning January 1, 2019, medical expenses, for all taxpayers, are deductible to the extent that they exceed 10% of youir AGI. It was 7.5% of AGI in 2018.

In addition, the AMT preference related to medical expenses is eliminated.
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2019 Tax Law Changes

2019 - Itemized deductions-Charitable Contributions

Asked Monday, December 24, 2018 by an anonymous user
For contributions made in tax years beginning after December 31, 2017 and before January 1, 2026 the 50% limitation is increased to 60%. Any amounts in excess of the new limit can be carried forward and deducted for up to five years (as was allowed under prior law).

For any contribution made in a tax year beginning after December 31, 2016, the requirement of a charity to provide contemporaneous written acknowledgement as substantiation for any contribution of $250 or more is repealed.

Beginning in 2018, no charitable deduction is allowed for any payment to an institution of higher learning in exchange for which the contributor is given a right to purchase seats at an athletic event.

Prior to the enactment of the new law, charitable contributions were deductible with certain ceilings based upon a percentage of AGI. A 50% of AGI limit applied to cash contributions to public charities and certain private foundations.
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2019 Tax Law Changes

2019 - Itemized deductions - Miscellaneous Itemized Deductions

Asked Monday, December 24, 2018 by an anonymous user
For tax years beginning after December 31, 2017 and before January 1, 2026 all miscellaneous itemized deductions that were previously subject to a 2% AGI limitation are suspended.

Among the items included in this elimination are:
All unreimbursed employee business expenses;
Union dues
Brokerage fees
All expenses related to tax return preparation;
Appraisal fees for charitable contributions;
Investment expenses.
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2019 Tax Law Changes

2019 - Itemized deductions - Residence Interest

Asked Monday, December 24, 2018 by an anonymous user
Pursuant to the Act, for tax years beginning after December 31, 2017 and before January 1, 2026, a deduction will only be allowed for interest on a debt that qualifies as Acquisition Indebtedness. No deduction will be allowed for Home Equity debt.

In addition, the Act reduces the amount of eligible Acquisition Indebtedness borrowing to $750,000 for any debt incurred on or after December 15, 2017.

A taxpayer who entered into a binding contract before December 15, 2017 to close on the purchase of a residence before January 1, 2018, and who actually closes on the acquisition before April 1, 2018, shall be considered to have incurred the Acquisition Indebtedness before December 15, 2017.

ii. The old Acquisition Indebtedness limits continue to apply to taxpayers who refinance existing Acquisition Indebtedness as long as the indebtedness resulting from the refinancing does not exceed the amount of the original debt.

For 2017, the deduction for Qualified Residence Interest was limited to interest paid on up to $1,000,000 of borrowing that qualified as “Acquisition Indebtedness” and up to $100,000 of borrowing that qualifies as “Home Equity Indebtedness”.
Acquisition Indebtedness being defined as debt incurred to acquire, construct or substantially improve a principal residence or a second home, with no restriction on the use of Home Equity Indebtedness.
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2019 Tax Law Changes

2019 - Itemized deductions- Personal casualty losses

Asked Monday, December 24, 2018 by an anonymous user
Personal casualty losses occurring in a tax year beginning after December 31, 2017 but before January 1, 2026 are not deductible, unless the loss is incurred as a result of a federally-declared disaster.
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2019 Tax Law Changes

2019 - Retirement plan limits

Asked Monday, December 24, 2018 by an anonymous user
Salary reduction deferrals $19,000 for 401(k) or 403(b) and most 457 plans. Catch-up Contributions $6,000

IRA Contributions $6,000 - IRA Catch-up Contributions remains at $1,000.

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