We keep you updated with the latest news from Martin Hood and helpful information whenever there is a change to employment or tax laws.
October 17, 2019
As 2019 is coming to an end, and we’re preparing for another tax season, here’s a few 2020 filing season changes for 2019 tax returns:
Increased Standard Deduction
The standard deduction amounts will be slightly increased to continue to allow more individuals to file without itemizing deductions on Schedule A.
Redesigned New Supplemental Schedules
For 2018 tax returns, taxpayers had six new supplemental schedules that would build on the Form 1040.
For 2019 tax returns, those schedules have been redesigned and merged into three schedules.
Form 1040 – SR
New for 2019, seniors (aged 65 and older) will have their own tax return option thanks to the Bipartisan Budget Act of 2018.
Insurance Penalty
The penalty (individual mandate) for not having health insurance no longer applies for 2019 federal tax returns. However, some states have their own individual health insurance mandate, requiring you to have qualifying health coverage or pay a fee with your state taxes for the 2019 tax year.
As of now, Massachusetts, New Jersey, and the District of Columbia are the only states with health insurance m
Schedule A Medical Expense Threshold Increased to 10% vs the 7.5%
For 2019 tax returns, the threshold for medical expenses for Schedule A will revert back to 10% of AGI in place of the 7.5% it’s been for the last two years.
Qualified Business Income Deduction (QBID) Form(s)
Income Tax Brackets & Tax Rates
For 2019 tax returns, there are still seven tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. However, the salary threshold that brings you to a higher tax rate has increased a little.
Alimony Deduction Eliminated
401k Contributions Limits
IRA Contribution Limits
AMT Exemption Increased
The Alternative Minimum Tax (AMT) exemption amounts have been increased for inflation for 2019, making fewer taxpayers subject to AMT.
HSA Contribution Limits
Whether you’re already a client or you want to hire an accounting firm, it’s always a good idea to talk tax planning with your accountant. Reach out with questions before the year ends!
For full source information: 2019 Year-End Preparations Before Another Tax Season