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Learn the Standard Deduction Amounts according to IRS Announces 2019 Tax Rates

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 Standard Deduction Amounts according to IRS Announces 2019 Tax Rates

Presented by paystubmakr.com

By John Wolf

The annual inflation adjustments for the year 2019 was announced by the Internal Revenue Service (IRS),

The announcement included the:

  • The tax rate schedules adjustments,

  • The tax tables adjustments

  • cost-of-living adjustments.

The tax year 2019 beginning 1. 1. 2019 numbers are presented below.

The numbers and tables in this article are for the tax calculation referred to the tax year 2019 to be used for the tax return for the IRS at 2020

If you can predict your business activity for 2019 to be very much like the year 2018 you can use this numbers to estimate your liability.

If you have plans for essential changes in your business that will increase your income significantly or your personal life like getting married or having children you can adjust the numbers and update your prediction for taxation of the near future. You can use the IRS withholding calculator to update your projections, and add the use of  Updated Form W -4.

Watch Tax law 2018

Tax Brackets and Tax Rates. 

The traditional seven tax rates are:10%, 12%, 22%, 24%, 32%, 35% and 37% Below is the breakout by filing status.

  • Tax rates are progressive by nature the higher the earning the higher is the tax rate. Keep track of your income and tax rates, and change the multiplication factor according.

The Standard Deduction Amounts will be increased to $12,200 for a taxpayer alone, $18,350 for a taxpayer that is head of household, and $24,400 for married couples filing jointly and surviving spouses.


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

  • For the year 2019, the standard deduction amount for an individual taxpayer who will be claimed as a dependent on the same taxpayer will not exceed the larger amount of $1,100 or the total amount of $350 and the individual’s earned income.

For 2019 there is no personal exemption amount. The personal exemption amount was changed to zero (0) under the new tax law or its other name, the Tax Cuts and Jobs Act. 

Adjusted for inflation is the alternative minimum tax (AMT) exemption amounts are.

Here’s what AMT numbers look like for 2019:


AMT 2019KPE

Kiddie Tax: Unearned income for children up to 19 years old and college students under 24. When a young person has income that comes from dividends and interest it is a taxable income it will be taxed according to the brackets for trusts and estates

Earning income will be treated as before

Schedule A has some changes about itemized deductions that include:

  • Medical and Dental Expenses floor rises from 7.5% in 2018 to 10% of your Adjusted gross income AGI.

  • State and Local Taxes Deductions for income and property taxes remain in effect with a limited to a combined amount of $10,000 or $5,000 for a married taxpayer that files separately

  • Home Mortgage Interest let you deduct the interest on acquisition indebtedness up to $750,000 ($375,000 for married taxpayers filing separately). Read Interest on Home Equity Loans Often Still Deductible Under New Law

  • Charitable donations were changed by the new tax law cash donations to public charities increased from 50% to 60% in 2018 and will stay the same for 2019.

  • Casualty and Theft Losses for personal deduction are repealed, except when losses attributable to a federal disaster area.

  • Job Expenses and Miscellaneous Deductions subject only to 2% floor. non-reimbursed employee expenses, tax preparation expenses cannot exceed 2% of the AGI.

    Itemize deduction known as the Pease limitations, have no restrictions for the tax year 2019

Some of the changes  tax credits and deductions made under the 2017 tax law

  • Child Tax Credit was expanded to $2,000 per qualifying child and is refundable up to $1,400. The bill also includes temporary permission for $500 nonrefundable.

  • Earned Income Tax Credit (EITC) is $6,557 for married taxpayers filing jointly the tax return who have three or more qualifying children.

  • Adoption Credit For 2019, the credit allowed for an adoption of a child with special needs is $14,080.

  • Student Loan Interest Deduction For 2019, the maximum amount that a taxpayer can deduct for interest paid on student loans stay on $2,500.

  • Lifetime Learning Credit 2019 tax year is $116,000, up from $114,000 for tax year 2018.

  • Medical Savings Accounts in short (MSA) For the tax year 2019, is a higher deductible health plan (HDHP) An annual deductible that has to be no less than $2,350 but not more than $3,500; for self-only coverage, the highest out-of-pocket expense amount is the total of $4,650, but not over the $7,000. Family coverage, the maximum out-of-pocket expense limit is $8,550.

  • The foreign earned income exclusion for the tax year 2019

  • Foreign Earned Income Exclusion. For tax year 2019, the foreign earned income exclusion is $105,900, up from $103,900 for tax year 2018.

  •  Shared individual responsibility payment is not in effect anymore.

Pass-throughs and business owners who file a Schedule C, including the new Section 199A deduction, are affected by those changes.

 

 

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