LongSchaefer Explains Tax Changes for Filing Your 2019 Income Taxes

Tax Preparation 2019 Income Taxes LongSchaefer

Individuals and some businesses have until April 15, 2020, (S-Corporations and Partnerships have a filing deadline of March 16th or October 15th with extensions) to file their 2019 income taxes or request an extension of time to file through the IRS. Every year, Congress seems to change the tax code. Filing your 2019 taxes is no exception, thanks to the tax reform package. Today’s blog from LongSchaefer explains the major tax changes for filing your 2019 income taxes for individuals.

Tax Relief for Individuals and Families

Standard deductions nearly doubled for everyone. Deductions help you lower the amount of income that is subject to income tax by the IRS. If you’re single, the standard deduction is $12,200 instead of $6,350. Married couples filing their taxes together have a standard deduction of $24,400 rather than $12,700. LongSchaefer can show you how to take advantage of increased deduction amounts. 

Improved Tax Credits

Tax credits also increased for filing 2019 income taxes. Tax credits may actually raise your refund amount. The child tax credit increased from $1,000 to $2,000 per child. Also, heads of household may be able to claim $500 in tax credits for each individual they support that is not their child. 

Tax Rates and Brackets

Congress changed the tax rates and brackets, lowering the tax rate for many individuals and joint filers.  The 2019 federal income tax brackets (for taxes due in April 2020, or in October 2020 with an extension) look like this:

Tax rate

  • Single
  • Married, filing jointly
  • Married, filing separately
  • Head of household

10%

  • $0 to $9,700
  • $0 to $19,400
  • $0 to $9,700
  • $0 to $13,850

12%

  • $9,701 to $39,475
  • $19,401 to $78,950
  • $9,701 to $39,475
  • $13,851 to $52,850

22%

  • $39,476 to $84,200
  • $78,951 to $168,400
  • $39,476 to $84,200
  • $52,851 to $84,200

24%

  • $84,201 to $160,725
  • $168,401 to $321,450
  • $84,201 to $160,725
  • $84,201 to $160,700

32%

  • $160,726 to $204,100
  • $321,451 to $408,200
  • $160,726 to $204,100
  • $160,701 to $204,100

35%

  • $204,101 to $510,300
  • $408,201 to $612,350
  • $204,101 to $306,175
  • $204,101 to $510,300

37%

  • $510,301 or more
  • $612,351 or more
  • $306,176 or more
  • $510,301 or more

What do these figures mean? Your tax rate may be lower than last year’s if you fall into these thresholds, provided you didn’t have a substantial jump in your income from 2018 to 2019. LongSchaefer can show you the implications of being in a particular tax bracket in terms of how you can optimize your tax return or tax bill.

Eliminations and Reduced Limits

The tax changes eliminated the penalty for not having health insurance. Unfortunately, the law also eliminated the personal and dependent exemptions that amounted to $4,050. There is also a cap of $10,000 you can deduct for property, income, and sales taxes on a state and local level. The amount of mortgage debt you can use as an itemized deduction is down to $750,000 instead of $1 million. LongSchaefer can help you navigate these new figures, so you get the most out of your tax filing.

Tax Preparation and Planning by LongSchaefer

These tax changes are just a few of the many developments that will affect tens of millions of Americans this year. The experts at LongSchaefer can make tax time less painful for you, whether you owe income taxes to Uncle Sam or if you’re expecting a refund. Contact LongSchaefer or call (513) 245-0300 for more information.

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May 2020 COVID-19 Update

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