There was no sweeping tax reform in 2019, but you’ll still notice some important changes when you file.
6 New Changes for Filing 2019 Federal Income Taxes
The Tax Cut and Jobs Act, which took effect in 2018, brought sweeping changes that affected how you filed your federal taxes and how much tax you paid for 2018. [1] The new legislation’s changes included reducing most tax rates and nearly doubling standard deduction amounts for tax year 2018.
Now that the April 15, 2020 tax due date looms, you’ll find some important differences from last year when filing your 2019 federal income tax return, including a couple of Tax Cuts and Jobs Act holdovers that didn’t take effect until 2019.
Click or swipe to learn 6 changes that may affect how much federal income tax you will pay for 2019.
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1. Higher Standard Deductions Amounts
Many federal income taxpayers for tax year 2018 chose to take the standard deduction, which nearly doubled when the Tax Cuts and Jobs Act took effect in 2019, instead of itemizing. The standard deduction amounts for the 2019 tax year are slightly higher, adjusted for inflation.
For tax year 2019, the standard deduction increased from $12,000 to $12,200 for single or married filing separately, from $24,000 to $24,400 for married filing jointly or qualifying widow(er) and from $18,000 to $18,350 for head of household filing status.
Find out: How to File Taxes Like a Pro
2. No more Affordable Care Act penalty
In previous years, federal taxpayers who didn’t have qualifying health coverage or an exemption from the individual health care mandate had to pay a “shared responsibility payment” based on either a percentage of their household income that exceeded the filing threshold or a flat dollar amount. However, beginning in 2019, the Tax Cuts and Jobs Act eliminated the shared responsibility payment.
The shared responsibility payment is now reduced to zero for months after December 31, 2018. However, your state may have its own individual health mandate, so you may still have to pay a fee when filing 2019 state taxes.
3. New tax form for seniors
For tax year 2019, the IRS has a new tax form, 1040-SR, [2] that taxpayers born before January 2, 1955, have the option to use when filing federal income tax. Form 1040-SR has only one page instead of Form 1040’s two pages, larger print and roomier fill-in boxes. [3] Form 1040-SR also has a chart of standard deduction amounts by filing status aimed specifically toward people 65 and older.
Aside from those conveniences, the new form isn’t necessarily “simplified” for seniors, since 1040-SR uses the same schedules and instructions as those used for Form. [4]
4. Alimony changes for divorced taxpayers
Another change from the Tax Cuts and Jobs Act that didn’t take effect until 2019 affects alimony payments, with different tax consequences – depending on whether you’re the one paying alimony or the person receiving alimony payments.
If you entered into a divorce or separation agreement after December 31, 2018, alimony received won’t be included as part of your 2019 income. If you made alimony payments to a spouse or former spouse under a divorce or separation agreement entered into after December 31, 2018, you now won’t be able to take a deduction for alimony paid.
5. Expanded disaster tax relief
The IRS has expanded its definition of a qualified disaster [5] loss to include a casualty or theft loss of personal property due to a federally declared disaster that occurs between January 1, 2018 through February 18, 2020. [6] If you aren’t itemizing deductions, you may qualify for a higher standard deduction based on your qualified disaster losses.
6. Extended tax provisions
Certain tax benefits that expired at the end of 2017 are extended for 2019, including tuition and fees deduction, mortgage insurance premiums deduction, nonbusiness energy property credit, alternative fuel vehicle refueling credit, and the Indian employment credit.
You can claim the benefits you’re eligible for on your 2019 return. You can also file an amended return to claim these tax benefits for 2018. [7]
This article by Deb Hipp was originally published on Debt.com.
Source:
[2] https://www.irs.gov/pub/irs-pdf/f1040s.pdf
[3] https://www.irs.gov/pub/irs-pdf/f1040.pdf
[4] https://www.irs.gov/pub/irs-pdf/f1040.pdf
[5] https://www.irs.gov/pub/irs-pdf/i4684.pdf
[6] https://www.irs.gov/newsroom/tax-relief-in-disaster-situations
[7] https://www.irs.gov/forms-pubs/about-form-1040x
Published by Debt.com, LLC
