What are the New 2019 IRS Tax Return Changes?

The Internal Revenue Service (IRS) has announced the tax year 2019 annual inflation adjustments including the tax rate schedules, income brackets, and many other tax changes. Please remember the tax year 2019 adjustments are used on tax returns filed in April 2020.

Notable 2019 Tax Items

The tax items for the tax year 2019 of greatest interest to most taxpayers include the following:

1. The standard deduction for married filing jointly rises to $24,400 for the tax year 2019, up $400 from 2018. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,200 for 2019, up $200, and for heads of households, the standard deduction will be $18,350 for tax year 2019, up $350.
2. The personal exemption for the tax year 2019 remains at 0 (zero), as it was for 2018, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act (TCJA).
3. For the tax year 2019, the top rate is 37% for individual single taxpayers with incomes greater than $510,300 ($612,350 for married couples filing jointly). The other rates are as follows:

• 35%, for incomes over $204,100 ($408,200 for married couples filing jointly);
• 32% for incomes over $160,725 ($321,450 for married couples filing jointly);
• 24% for incomes over $84,200 ($168,400 for married couples filing jointly);
• 22% for incomes over $39,475 ($78,950 for married couples filing jointly);
• 12% for incomes over $9,700 ($19,400 for married couples filing jointly).
• The lowest rate is 10% for incomes of single individuals with incomes of $9,700 or less ($19,400 for married couples filing jointly).

4. For 2019, as in 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the TCJA.
5. The tax year 2019 maximum Earned Income Credit amount is $6,557 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,431 for the tax year 2018.
6. For the tax year 2019, the monthly limitation for the qualified transportation fringe benefit is $265, as is the monthly limitation for qualified parking, up from $260 for the tax year 2018.
7. For the calendar year 2019, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is 0 (zero), per the TCJA; for 2018 the amount was $695.
8. For the taxable years beginning in 2019, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $2,700, up $50 from the limit for 2018.
9. Estates of decedents who die during 2019 have a basic exclusion amount of $11,400,000, up from a total of $11,180,000 for estates of decedents who died in 2018.
10. The annual exclusion for gifts is $15,000 for the calendar year 2019, as it was for the calendar year 2018.
11. The maximum credit allowed for adoptions is the number of qualified adoption expenses up to $14,080, up from $13,810 for 2018.

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