Federal Tax Updates
Here’s what’s new for 2019:
- Alternative Minimum Tax (AMT) exemption amounts increased:
- IRA deduction expanded — You might be able to claim a deduction if both of these apply:
- You were covered by a retirement plan.
- Your income was less than $71,000 — or $118,000 for married filing jointly or qualifying widow(er)
If your spouse was covered by a retirement plan but you weren’t, you might be able to claim a deduction. Your income has to be less than $193,000 to claim a deduction in this case.
- Current standard mileage rates:
- $0.58 a mile for business use of a vehicle
- 23.5 cents a mile for medical care
- Earned Income Credit (EIC) maximum income changes are:
- Three or more children lived with you and you earned less than $47,747 — or $53,267 if married filing jointly
- Two children lived with you and you earned less than $46,703 — or $49,974 if married filing jointly
- One child lived with you and you earned less than $41,094 — or $44,651 if married filing jointly
- No children lived with you and you earned less than $15,570 — or $20,330 if married filing jointly
- The maximum investment income you can earn and still get the EIC increased to $3,600.
- Elective salary deferrals:
- No exceptions — maximum amount is $18,000
- SIMPLE plans only — maximum amount is $12,500
- 403(b) plans and qualify for the 15-year rule — maximum amount is $21,000
- Catch-up contributions for taxpayers age 50 or over has increased to $6,000. Exceptions include for Section 401(k)(11) and SIMPLE plans
What happens if you miss the tax extension deadline of October 15? Understand the consequences of late tax filing from the experts at H&R Block.
A letter was sent to your employer releasing the lock-in on the amount of withholding from your paycheck. Learn more about IRS letter 2813C.
Have you ever thought about investing in a Cayman Islands tax haven? Before opening an account, or making adjustments to an already existing account, review these tax tips.
If you discover that you made an error on your tax return, you may need to file IRS Form 1040X, Amended U.S. Individual Income Tax Return. Learn more from H&R Block.