1.) Changes to the amounts taxed for each income bracket
The 7 tax income brackets remain unchanged, but the amounts each bracket is taxed have gotten an overhaul. Here are the new rates for taxpayers filing as individuals.
Taxable Income Bracket Tax Due
10% $0-$9,700 10% of taxable income
12% $9,701 -$39,475 $970 +12% of income $9,700+
22% $39,476 – $84,200 $4,543+22% of income $39,475+
24% $84,201 – $160,725 $14,382.50+24% of income $84,200+
32% $160,726- $204,100 $32,748.50+32% of income $160,725+
35% $204,101 – $510,300 $46,628.50+35% of income $204,100+
37% $510,301+ $153,798.50+37% of income $510,300+
You can check out the taxable income rates for couples filing jointly and for individuals filing as heads of households here.
2.) Changes in standard deduction amounts
The standard deduction in 2019 will be $12,200 for individuals, $18,350 for heads of household, or $24,400 for married couples filing jointly and surviving spouses.
3.) Elimination of personal exemptions
The personal exemption amount is being eliminated for the 2019 tax year.
4.) Changes to itemized deductions
Some of the itemized deduction changes for 2019 include:
- Medical and dental expenses. For 2019, you can only deduct those expenses exceeding 10% of your adjusted gross income (AGI).
- State and local taxes (SALT). The new maximum for SALT deductions is a combined total of $10,000 for taxpayers filing jointly.
- Home mortgage interest. In 2019, home interest payments will be maxed at $750,000 for married couples filing jointly.
- Job expenses and miscellaneous. In 2019, you can only claim work-related deductions that are less than 2%of your AGI.
5.) Changes to tax credits
There have been several adjustments to various tax credits for 2019, including the following:
- Child Tax Credit. The child tax credit has increased to $2,000 per child.
- Earned Income Tax Credit (EITC). The maximum EITC amount for 2019 is $6,557 for married taxpayers filing jointly who have three or more children.
- Adoption Credit. The maximum adoption credit in 2019 for a child with special needs is $14,080. The ceiling for other adoptions is $13,810.
- Lifetime Learning Credit. For 2019, the AGI used by joint filers to determine the reduction in the Lifetime Learning Credit is increasing to $116,000.
6.) Retirement account contributions
For 2019, you can contribute a total of $6,000 to one or more traditional or Roth IRA(s) if you’re under age 50, and $7,000 if you’re age 50+. For 401(k)s, you can contribute $19,000, and $25,000 if you’re age 50+.
Your Turn: Which tax credit or deduction helps your finances most? Tell us all about it in the comments.
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