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Taxpayer Advocacy Panel
(TAP)
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the IRS?¨SPEAK
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By Andrea Price, TAP member representing Ohio
The Truth Contributor
Get Ready for Taxes: Important things to know for 2019 tax
year
With the tax filing season quickly approaching, the Internal
Revenue Service recommends taxpayers take time now to
determine if they are eligible for important tax credits.
The IRS recently
updated its Get
Ready page with
steps to take now for the 2020 filing season.
The tax items for tax year 2019 of greatest interest to most
taxpayers include the following dollar amounts:
·
The standard deduction for married filing jointly rises to
$24,400 for tax year 2019, up $400 from the prior year. For
single taxpayers and married individuals filing separately,
the standard deduction rises to $12,200 for 2019, up $200,
and for heads of households, the standard deduction will be
$18,350 for tax year 2019, up $350.
·
Taxpayers can claim the Child Tax Credit if they have a
qualifying child under the age of 17 and meet other
qualifications. The maximum amount per qualifying child is
$2,000. Up to $1,400 of that amount can be refundable for
each qualifying child. So, like the EITC, the Child Tax
Credit can give a taxpayer a refund even if they owe no tax.
The amount of the Child Tax
Credit begins to reduce or phase out at $200,000 of modified
adjusted gross income, or $400,000 for married couples
filing jointly.
·
The personal exemption for tax year 2019 remains at 0, as it
was for 2018, this elimination of the personal exemption was
a provision in the Tax Cuts and Jobs Act.
·
For tax year 2019, the top rate is 37 percent for individual
single taxpayers with incomes greater than $510,300
($612,350 for married couples filing jointly). The other
rates are:
o
35 percent, for incomes over $204,100 ($408,200 for married
couples filing jointly);
o
32 percent for incomes over $160,725 ($321,450 for married
couples filing jointly);
o
24 percent for incomes over $84,200 ($168,400 for married
couples filing jointly);
o
22 percent for incomes over $39,475 ($78,950 for married
couples filing jointly);
o
12 percent for incomes over $9,700 ($19,400 for married
couples filing jointly).
o
The lowest rate is 10 percent for incomes of single
individuals with incomes of $9,700 or less ($19,400 for
married couples filing jointly).
·
For 2019, as in 2018, there is no limitation on itemized
deductions, as that limitation was eliminated by the Tax
Cuts and Jobs Act.
·
The Alternative Minimum Tax exemption amount for tax year
2019 is $71,700 and begins to phase out at $510,300
($111,700, for married couples filing jointly for whom the
exemption begins to phase out at $1,020,600). The 2018
exemption amount was $70,300 and began to phase out at
$500,000 ($109,400 for married couples filing jointly and
began to phase out at $1 million).
·
The tax year 2019 maximum Earned Income Credit amount is
$6,557 for taxpayers filing jointly who have three or more
qualifying children, up from a total of $6,431 for tax year
2018. The revenue procedure has a table providing maximum
credit amounts for other categories, income thresholds and
phase-outs.
·
For tax year 2019, the monthly limitation for the qualified
transportation fringe benefit is $265, as is the monthly
limitation for qualified parking, up from $260 for tax year
2018.
·
For calendar year 2019, the dollar amount used to determine
the penalty for not maintaining minimum essential health
coverage is 0, per the Tax Cuts and Jobs act; for 2018 the
amount was $695.
·
For the taxable years beginning in 2019, the dollar
limitation for employee salary reductions for contributions
to health flexible spending arrangements is $2,700, up $50
from the limit for 2018.
·
For tax year 2019, participants who have self-only coverage
in a Medical Savings Account, the plan must have an annual
deductible that is not less than $2,350, an increase of $50
from tax year 2018; but not more than $3,500, an increase of
$50 from tax year 2018. For self-only coverage, the maximum
out-of-pocket expense amount is $4,650, up $100 from 2018.
For tax year 2019, participants with family coverage, the
floor for the annual deductible is $4,650, up from $4,550 in
2018; however, the deductible cannot be more than $7,000, up
$150 from the limit for tax year 2018. For family coverage,
the out-of-pocket expense limit is $8,550 for tax year 2019,
an increase of $150 from tax year 2018.
·
This Other Dependent Tax Credit is available to taxpayers
with dependents for whom they cannot claim the Child Tax
Credit. These include dependent children who are age 17 or
older at the end of 2019 or parents or other qualifying
individuals supported by the taxpayer.
·
Two credits can help taxpayers paying higher education costs for
themselves, a spouse or dependent. The American Opportunity
Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) are
claimed on Form
8863, Education
Credits. The AOTC is partly refundable. To get either
credit, the taxpayer or student usually must receive Form
1098-T, Tuition Statement, from the school attended. Some
exceptions apply. See the instructions to Form 8863 for
details.
·
The annual exclusion for gifts is $15,000 for calendar year
2019, as it was for calendar year 2018.
·
The maximum credit allowed for adoptions is the amount of
qualified adoption expenses to $14,080, up from $13,810 for
2018.
Everyone has something to say about taxes and the IRS.
Please take a moment to give us your suggestions for TAP to
consider by contacting one of the following:
TAP Ohio member:
tapohioandreaprice@gmail.com
Website:
www.improveirs.org ; Call toll-free at 1-888-912-1227 |
