An Overview of the Tax Changes for 2019
By now everyone is aware of President Trump’s Tax Cuts and Jobs Act that overhauled the tax code and generally lowered corporate and individual income tax rates beginning with the 2018 tax year. Following is an update of those changes as they will apply to the 2019 tax year (to be filed in April of 2020).
- The IRS has upwardly adjusted each tax bracket based on inflation. This means more of your income will be taxed at a lower rate.
- The standard deduction has also increased; going up $200 for individual filers and $400 for married joint filers. Head of household filers will get a $350 increase.
- The employee contribution limit for 401(k) and 403(b) plans has increased $500 to $19,000. Those 50 and older can contribute an additional $6,000 under the catch-up provisions.
- The IRA contribution limit has increased $500 to the annual maximum of $6,000.
- The federal mandate for health insurance has been eliminated and so has the penalty for not having insurance. Some states may have their own mandate and penalty.
- The federal gift and estate tax exemption is increasing from $11.18 million to $11.4 million per person.
- The annual gift tax exclusion will remain at $15,000 per recipient in 2019.
- If your divorce is finalized or you modify your alimony agreement on or after Jan. 1, 2019, then alimony payments cannot be deducted from the payer's taxable income for 2019. If you are the one receiving alimony, it should not be reported.
For additional information or questions on how these tax changes might affect your specific situation please do not hesitate to contact your Relationship Manager.
The facts and opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Where applicable, all data and information has been gathered from sources believed to be accurate such as the internet, nonaffiliated 3rd parties, news articles and professional subscriptions but this information is not warranted to be correct, complete or true. Vantage Financial Partners Limited, Inc. and its agents are not tax advisors or accountants. We strongly encourage you review your tax situation, opportunities and liabilities with your tax advisor before making any changes. This article is not intended as tax advice.