Gifts of up to $15,000 (unchanged from 2018) to any person can be made in 2019 without needing to file a gift tax return. The AMT is assessed at two tax rates based on income: 26% and 28%. However, this exemption starts to phase out for taxpayers with income over $510,300 (single) or $1,020,600 (married filing jointly). The AMT exemption amount in 2019 is $71,700 (single) or $111,700 (married filing jointly). If the tax owed by AMT is higher than a taxpayer’s regular tax liability, then the taxpayer will pay the higher amount. The alternative minimum tax (AMT) uses a different set of rules to recalculate taxable income. In 2018 and earlier, this penalty could add up to hundreds or even thousands of dollars for uninsured individuals and families. This was referred to as the individual mandate under Obamacare. Starting in 2019, the penalty for not maintaining health insurance coverage was eliminated. So, when you realize capital gains with income over $200,000 (single) or $250,000 (married filing jointly), there is a 3.8% tax in addition to the tax rates shown above. Note that the Medicare surtax introduced by Obamacare includes capital gains in the definition of net investment income. Long-term capital gains tax rates are unchanged in 2019 however, the tax brackets have been updated: Owners of pass-through businesses can take a 20% deduction against up to $160,700 (single) or $321,400 (married filing jointly) of qualified business income. Qualified Business Income Deduction (Section 199A) However, this credit begins to be phased out as income exceeds $200,000 (single) or $400,000 (married filing jointly). This exemption was previously a $4,050 deduction for taxpayers who met certain income requirements.Ī credit of $2,000 is available for every qualifying child (dependent and under age 17) in a household. The Tax Cuts and Jobs Act eliminated the personal exemption for all taxpayers effective 2018. The limit on annual additions to defined contribution retirement plans was increased to $56,000. For SIMPLE plan participants age 50 and over, an additional $3,000 catch-up contribution is allowed for a total of $16,000. Participants in SIMPLE IRA and SIMPLE 401k retirement plans may make elective salary deferrals of up to $13,000 in 2019. For participants age 50 and over, an additional $6,000 catch-up contribution is allowed for a total of $25,000. Participants in 401(k), 403(b), and 457 retirement plans may make elective salary deferrals of up to $19,000 in 2019. The credit can be worth up to $1,000 per taxpayer depending on income limits. For the non-covered spouse to take the full deduction, income must be less than $193,000.Ĭontributions to employer retirement plans and IRAs qualify for a saver’s tax credit if income is less than $32,000 (single) or $64,000 (married filing jointly). But if a single taxpayer is covered by a retirement plan, an IRA deduction is fully deductible only if income is less than $64,000.įor a married couple with one spouse covered by a retirement plan, income must be less than $103,000 for the covered spouse to qualify for the full IRA deduction. IRA contributions are fully deductible when an individual is not covered by an employer’s retirement plan. For taxpayers age 50 and over, an additional $1,000 catch-up contribution is allowed for a total of $7,000.Ĭontributions to Roth IRAs are limited (or disallowed) for taxpayers with an income greater than $122,000 (single) or $193,000 (married filing jointly). The IRA and Roth IRA contribution limit has increased to $6,000 in 2019. Taxpayers over the age of 65 (and the blind) get an additional standard deduction of $1,650 (single filers) or $1,300 (for each married taxpayer).įor taxpayers who itemize on Schedule A instead of claiming the standard deduction, the state and local tax deduction is capped at $10,000 in 2019 (same as 2018). For married filing jointly filers, the standard deduction was increased to $24,400. The standard deduction for single filers increased by $200 to $12,200.
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