by Erika Hoppe firstname.lastname@example.org
Every year, the IRS provides annual inflation adjustments for various tax provisions, such as tax rate schedules and the standard deduction. Here are some of the key tax items that have changed for the 2019 tax year (these amounts will be used in 2020 to prepare your 2019 tax return):
Tax rates – Similar to 2018, there are seven tax rates, ranging from 10% to 37%. The rates apply in the following manner:
Standard deduction – The standard deduction amounts increase slightly from 2018. For 2019, they are $12,200 for single and married filing separately; $24,400 for married filing jointly and surviving spouse; and $18,350 for head of household. The additional standard deduction for those over 65 or blind remains at $1,300 for married filing jointly. For single taxpayers (not surviving spouse), however, the additional standard deduction increases to $1,650.
Medical and dental expenses – For 2019, qualified medical expenses must exceed 10% of AGI to be deductible. This increased from 7.5% of AGI in 2018.
Standard mileage rates – For 2019, the standard mileage rate is 58 cents per mile driven for business (up from 54.5 cents per mile in 2018) and 20 cents per mile driven for medical or moving purposes (up from 18 cents per mile in 2018). The standard mileage rate for charitable purposes remains the same at 14 cents per mile driven.
Shared Responsibility Payment – Under the Affordable Care Act, all taxpayers and their dependents were required to have health insurance that provided minimum essential coverage for tax years before 2019. Taxpayers who did not have health insurance would either qualify for an exemption or would have to pay a penalty. Beginning in 2019, the penalty for not having health insurance has been eliminated.
These are just a few of the changes that will affect the 2019 tax year. Additional changes and inflation adjustments can be found in Revenue Procedure 2018-57.