Changes to the 2019 Standard Deduction
The standard deduction is the amount that you can deduct from your income before calculating your tax liability
if you do not itemize your deductions.
Previous law: The standard deduction for married filing jointly is 24,000 for tax year 2018; 12,000
for single taxpayers; and 18,000 for heads of households, 24,000 for qualifying widow(er)s according to the IRS. New law: The standard deduction for married filing jointly would increase to $24,400 for joint filers; 12,200 for single taxpayers; and 18,350 for heads of households, according to the TPC analysis. The increased deduction ends after 2025.
A personal exemption is the amount that you can deduct from your income for every taxpayer
and most dependents claimed on your return.
Previous law: $4,050 per person, which means a married couple with two dependents would receive a personal exemption of $16,200. New law: The personal exemption is eliminated. The exemption returns after 2025.
Child Tax Credit
Previous law: Married couples filing jointly who earn less than $110,000 can receive a tax credit of up to $1,000 for each child under 17 years old that they can claim as dependents on their tax returns ($55,000 is the threshold for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers). New law: The credit would increase up to $2,000 per child, and the first $1,400 would be refundable according to the TPC analysis, meaning the credit could reduce your tax liability below zero and you would still be able to receive tax refund.. The cut off foe the tax credit would increase from $110,000 to $400,000 for married couples filing jointly. The expanded credit ends after 2025.
State and Local Tax Deductions
Previous law: Taxpayers who itemize their taxes can deduct state and local property and real estate taxes, and either state and local income or sales taxes. For more information, see our item “The Facts on the SALT Deduction.”
New law: The SALT deduction will be capped at $10,000. The deduction ends after 2025.
Previous law: Taxpayers who itemize their taxes can deduct interest payments on mortgage debt of up to $1.1 million. That includes up to $100,000 of home equity debt. New law: For current mortgage holders, there is no change. But the deductible limit drops to $70,000 for new debt incurred after Dec. 31, 2017. Also, homeowners may not claim a deduction for existing and new interest on home equity debt, beginning Jan. 1, 2018. The mortgage deduction changes expire after 2025.
Medical Expense Deduction
Previous law: Taxpayers who itemize their taxes can deduct medical expenses that exceed 10 percent of their adjusted gross income, or AGI, according to the IRS. New law: Taxpayers can deduct medical expenses that exceed 7.5 percent of AGI in 2017 and 2018, but the new deduction level ends in 2019.
Limits on Itemized Deductions
Previous law: Itemized deductions may be limited, and total itemized deductions may be phased out ((reduced), I your adjusted gross income for 2017 exceeds $313,800 for married couples filing jointly or qualifying widows ($261,500 for single filers, $2887,650 for heads of household and $156,900 for married couples filing separately), according to the IRS. New law: The itemized deduction limits are repealed through the 2025 tax year.
Individual Income Tax Rates
Taxpayers can either use the standard deduction or itemize deductions to reduce the amount of taxable income they must pay. All other things being equal, that means that payers in nearly every tax bracket will pay less in taxes under the new law.
Here’s the new the brackets and tax rates for 2019.
2019 Individual Income Tax Rates
Married Filing Jointly – Taxable Income
Head of Household – Taxable Income
|10 percent||0 to $9,700||0 to $19,400||0 to $13,850|
|12 percent||$9,701 to $39,475||$19,401 to $78,950||$13,851 to $52,850|
|22 percent||$39,476 to $84,200||$78,951 to $168,400||$52,851 to $84,200|
|24 percent||$84,201 to $160,725||$168,401 to $321,450||$84,201 to $160,700|
|32 percent||$160,726 to $204,100||$321,451 to $408,200||$160,701 to $204,100|
|35 percent||$204,101 to $510,300||$408,201 to $612,350||$204,101 to $510,300|
|37 percent||$510,301 and up||$612,351 and up||$510,301 and up|