Your 2019 Tax Fact Sheet and Calendar

Your 2019 Tax Fact Sheet and Calendar

The year 2018 ushered in seismic tax-code changes that you're likely to see reflected on your 2018 return: notably, the end of personal exemptions as well as higher standard deduction amounts that mean many fewer taxpayers are apt to benefit from itemizing their deductions than in the past.

As 2019 dawns, the changes to the tax code are far less remarkable--more evolutionary than revolutionary. Most of the changes amount to tweaks that reflect the effects of inflation in various provisions within the tax code. 

Here are key tax-related dates and data points to have on your radar for the year ahead.

2019 Important Tax Facts for All Taxpayers

Income Tax Brackets: Seven tax brackets remain, but the specific parameters have changed, as follows: 

  • 10%: Single taxpayers with incomes between under $9,700; married couples filing jointly with incomes of less than $19,400.
  • 12%: Single taxpayers with incomes between $9,700 and $39,475; married couples filing jointly with incomes between $19,400 and $78,950.
  • 22%: Single taxpayers with incomes between $39,475 and $84,200; married couples filing jointly with incomes between $78,950 and $168,400.
  • 24%: Single taxpayers with incomes between $84,200 and $160,725; married couples filing jointly with incomes between $168,400 and $321,450.
  • 32%: Single taxpayers with incomes between $160,725 and $204,100; married couples filing jointly with incomes between $321,450 and $408,200.
  • 35%: Single taxpayers with incomes between $204,100 and $510,300; married couples filing jointly with incomes between $408,200 and $612,350.
  • 37%: Single taxpayers with incomes of $510,300 or more; married couples filing jointly with incomes of $612,350 or more.

Standard Deduction: Standard deduction amounts are increasing slightly in 2019, to $12,200 for individuals and $24,400 for married couples filing jointly.

AMT-Exempt Amounts: The exemption amounts for the alternative minimum tax are increasing slightly in 2019, to $71,700 for single filers and $111,700 for married couples filing jointly. The full exemptions are available to taxpayers with alternative minimum taxable incomes of less than $510,300 (single filers)/$1,020,600 (married couples filing jointly).

Estate/Gift Tax Exemption: This amount is increasing slightly, to $11.4 million per individual. The annual gift-tax exclusion amount stays the same at $15,000. (Note that annual gifts in excess of this amount do not automatically trigger any sort of gift tax, as discussed here. Most people won't owe estate or gift taxes in their lifetimes under current tax laws.)

Dividends and Capital Gains

Qualified Dividend and Long-Term Capital Gains Rates: Three rates are still in place for dividends and long-term capital gains--0%, 15% and 20%--but they don't map perfectly by tax bracket as they did in the past. Here are the parameters for each of the rates.

• 0%: Single taxpayers with incomes between $0 and $39,375; married couples filing jointly with incomes between $0 and $78,750.

• 15%: Single taxpayers with incomes between $39,375 and $434,550; married couples filing jointly with incomes between $78,750 and $488,850.

• 20%: Single taxpayers with incomes over $434,550; married couples filing jointly with incomes over $488,850.

Medicare Surtax: As in years past, an additional 3.8% Medicare surtax will apply to the lesser of net investment income or the excess of modified adjusted gross income over $200,000 for single taxpayers and $250,000 for married couples filing jointly.

Retirement Plan Contributions

Contribution limits for 401(k), 403(b), 457 plan, or self-employed 401(k) (traditional or Roth): $19,000 under age 50; $25,000 for age 50 and older.

Total 401(k) contribution limits, including employer (pretax, Roth, aftertax) and employee contributions and forfeitures: $56,000 if under age 50; $62,000 if 50-plus.

Income limits for 401(k), 403(b), 457 plans: None, though annual compensation limits can come into play in certain situations.

SEP IRA contribution limit: The lesser of 25% of compensation or $56,000 ($62,000 for those 50-plus).

IRA contribution limits (Roth or traditional): $6,000 under age 50/$7,000 over age 50.
Income limits for deductible IRA contribution, single filers or married couples filing jointly who aren't covered by a retirement plan at work: None; fully deductible contribution.

Income limits for deductible IRA contribution, single filers covered by a retirement plan at work: Modified adjusted gross income under $64,000--fully deductible contribution; between $64,000 and $74,000--partially deductible contribution; more than $74,000--contribution not deductible.

Income limits for deductible IRA contribution, married couples filing jointly, if the spouse making the contribution is covered by a retirement plan at work:Modified adjusted gross income under $103,000--fully deductible contribution; between $103,000 and $123,000--partially deductible contribution; more than $123,000--contribution not deductible.

Income limits for deductible IRA contributions, married couples filing jointly, if the spouse making the contribution isn't covered by a retirement plan at work but his/her spouse is: Modified adjusted gross income under $193,000--fully deductible contribution; between $193,000 and $203,000--partially deductible contribution; more than $203,000--contribution not deductible.

Income limits for nondeductible IRA contributions: None.

Income limits for IRA conversions: None, but note that the tax legislation that went into effect in 2018 eliminated the opportunity to recharacterize a Roth IRA as a traditional IRA, or vice versa.

Income limits for Roth IRA contribution, single filers: Modified adjusted gross income under $122,000--full Roth contribution; between $122,000 and $137,000--partial Roth contribution; more than $137,000--no Roth contribution.

Income limits for Roth IRA contribution, married couples filing jointly:Modified adjusted gross income under $193,000--full Roth contribution; between $193,000 and $203,000--partial Roth contribution; more than $203,000--no Roth contribution.

Saver's Tax Credit, income limit, single filers: $32,000.

Saver's Tax Credit, income limit, married couples filing jointly: $64,000.

Health savings account contribution limit, single contributor: $3,500 (under 55); $4,500 (over 55).

Health savings account contribution limit, family coverage: $7,000 (contributor under 55); $8,000 (contributor 55-plus).

High-deductible health plan minimum deductible, self-only coverage: $1,350.

High-deductible health plan minimum deductible, family coverage: $2,700.

High-deductible health plan out-of-pocket maximum, self-only coverage: $6,750.

High-deductible health plan out-of-pocket maximum, family coverage: $13,500.

 

2019: Important Tax Dates to Remember
Jan. 1: New IRA, retirement plan, and HSA contribution and income limits went into effect for 2019 tax year, as listed above.

Jan. 15: Estimated tax payments due for fourth quarter of 2018.

April 15:

  • Individual tax returns (or extension request forms) due for 2018 tax year.
  • Estimated tax payments due for first quarter of 2019.
  •   Last day to contribute to IRA for 2018 tax year (2018 contribution limits: $5,500 under age 55; $6,500 for age 55 and above).
  • Last day to contribute to health savings account for 2018 tax year (2018 contribution limits: $3,400 for single coverage, contributor under age 55; $4,400 for single coverage, contributor age 55 and above; $6,750 for family coverage, contributor under age 55; $7,750 for family coverage, contributor age 55 and above).

June 15: Estimated tax payments due for second quarter of 2019.

Sept. 15: Estimated tax payments due for third quarter of 2019.

Oct. 15: Individual tax returns due for taxpayers who received a six-month extension.

Dec. 31:

  • Retirees age 70 1/2 and older must take required minimum distributions from traditional IRAs and 401(k)s; those RMDs are based on their balances at the end of 2018.
  • Last date to make contributions to company retirement plans (401(k), 403(b), 457) for 2018 tax year. 

 

 

This communication offers information on investment subjects of general interest which should not be construed as a recommendation to buy or sell securities.  Such decisions should consider the unique circumstances of the reader.  Our advice may differ depending on individual circumstances; non-clients must make their own evaluation of investment options and consider whether an investment is consistent with their objectives, risk tolerance and financial situation.  TWM disclaims any responsibility to update views expressed, which may not be relied on as investment advice   Past performance is no guarantee of a future results. Securities can lose money. Stock and bond securities are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.

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