If you aren’t sure what to expect when you prepare and file your taxes for 2019, in a recent article TaxAudit discusses the changes to the federal tax laws that could affect your return. TaxAudit provides audit defense support to individual and business tax filers.
The New Year is upon us – time to think about filing your 2019 return. Many of the provisions in the 2017 Tax Cuts and Jobs Act were activated in 2019, so your tax return may be somewhat different than it has been in previous years. Here are a few changes that may affect your return.
Higher Standard Deduction
For tax year 2019, the new standard deduction has risen from $12,000 for single filers to $12,200. For married filers, the deduction has gone from $24,000 to $24,400. Income tax rates for individuals have also been reduced. Here are the tax brackets for individuals:
- 10 percent: $9,700 and under
- 12 percent: $9,701 to $39,475
- 22 percent: $39,476 to $84,200
- 24 percent: $84,201 to $160,725
- 32 percent: $160,726 to $204,100
- 35 percent: $204,101 to $510,300
- 37 percent: $510,301 and up
The tax brackets for couples filing jointly are:
- 10 percent: $19,400 and under
- 12 percent: $19,401 to $78,950
- 22 percent: $78,951 to $168,400
- 24 percent: $168,401 to $321,450
- 32 percent: $321,451 to $408,200
- 35 percent: $408,201 to $612,350
- 37 percent: $612,351 and up
The additional deductions available to single filing seniors (over 65) and the legally blind have risen to $1,300 for 2019.
Increase in Retirement Savings Contributions
For tax year 2019, the limit for employee contributions for 401(k) and 403(b) plans has risen to $19,000. For employees over the age of 50, the IRS will allow an additional contribution of $6,000.
Roth IRA account holders will not be able to contribute directly to their Roth IRA accounts if their income for 2019 was in excess of $122,000. However, it may be possible to make a non-deductible contribution to a traditional IRA, which can then be converted to a Roth IRA.
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