On earlier this year, the IRS issued 2019’s annual inflation adjustments for the majority of tax provisions, along with the 2019 tax rate tables for individuals, trusts, and estates. 2019 and 2020’s tax returns will be prepared according to these adjustments.
2019 will see a variety of amounts raised on account of inflation. 2019’s standard deduction will be raised to $18,350 for heads of household, $24,400 for married couples filing jointly or surviving spouses, and $12,200 for individuals that are unmarried (aside from surviving spouses) or married individuals filing separately.
For taxpayers with a minimum of three or more children, the max amount of the earned income tax credit is being raised to $6,557 (up from $6,431 the previous year).
2019’s maximum adoption credit will be raised to $14,080. This amount also applies to the max amount that can be excluded from an individual’s gross income for expenses incurred or money paid by an employer under an adoption assistance program.
2019’s alternative minimum tax will have an exemption amount of $71,700 for individuals that are not married (aside from surviving spouses), $111,700 for married couples filing jointly and surviving spouses, $25,000 for trusts and estates, and $55,850 for married couples filing separately.
Tax years beginning in 2019 will have a Sec. 179 amount of $1,020,000. $2,550,000 will be 2019’s phaseout threshold.
In 2019, Sec. 199A(e)(2) will raise the qualified business income threshold to $321,400 for married couples filing jointly, $160,725 for married couples choosing to file separately, and $160,700 for heads of household and single individuals (an increase from the previous year’s maximum’s: $315,000 for returns filed jointly and $157,700 for 2018’s other taxpayers).
Foreign earned income exclusion will see its amount raise to $105,900 in the upcoming year (Sec. 911).
For descendants who pass away in 2019, the basic exclusion amount used to determine the unified credit against estate tax will be set at $11,400,000 (an increase of $220,000 from the previous year). $15,000 will remain as the tax exclusion amount for annual gifts. However, gifts to a spouse who is not a citizen of the United States will be increased by a total of $3,000 to $155,000.
For individuals who fail to file taxes or furnish payee statements will face updated penalties in 2019.