SECURITY REMINDERS FOR TAXPAYERS
Again, we are warning taxpayers to learn to recognize and avoid phishing emails, threatening phone calls and texts from thieves posing as legitimate organizations such as your bank, credit card company and government organizations, including the IRS. Do not click on links or download attachments from unknown or suspicious emails. Also, hang up the phone if someone is claiming to be the IRS. The IRS does not call taxpayers.
REMINDER - Some refunds will be held until Mid - February
Taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit may experience a refund hold. According to the Protecting Americans from Tax Hikes (Path) Act, the IRS cannot issue these refunds before mid-February.
EDUCATIONAL TAX CREDITS
Many clients depend on federal tax breaks to help offset the cost of higher education for themselves and dependents. A provision in trade legislation enacted in 2015 requires taxpayers to have in hand the 1098-T to claim any education tax benefits. This statement, which for several years has been sent by schools to students with copies to the IRS, verifies that you paid what the IRS calls “qualified educational expenses” in the preceding tax year. Please remember to bring your 1098-T statement with you along with any receipts for books, course materials and required equipment for this year’s tax filing, it will save you time and money. The 1098-T can also be found online in your student’s college account.
2019 TAX BRACKETS
- 10% for incomes of $9,700 or less (less than $19,400 for joint filers)
- 12% for incomes over $9,700 ($19,400 for joint filers)
- 22% for incomes over $39,475 ($78,950 for joint filers)
- 24% for incomes over $84,200 ($168,400 for joint filers)
- 32% for incomes over $160,725 ($321,450 for joint filers)
- 35% for incomes over $204,100 ($408,200 for joint filers)
- 37% for incomes over $510,300 for single filers ($612,350 for married couples filing jointly)
REQUIREMENTS TO FILE
According to the IRS, you need to meet a certain gross income threshold to file a tax return. It is also based on age and your filing status as seen below.
Under 65 – At least $12,200 Over 65 – $13,850
MARRIED FILING JOINTLY
Under 65 – $24,400 Over 65 – $27,000
HEAD OF HOUSEHOLD
Under 65 – $18,350 Over 65 – $20,000
TAXPAYERS ARE NO LONGER SUBJECT TO THE HEALTHCARE PENALTY
For the tax year 2019, if you don’t have minimum essential health care coverage, you don’t have to pay the shared responsibility penalty.
STANDARD DEDUCTION INCREASES
For 2019, the standard deduction increases to the following:
- Single – $12,200; a $200 increase from 2018
- Married filing jointly or Qualifying widow(er) – $24,400; a $400 increase from 2018
- Head of household – $18,350; a $350 increase from 2018
Remember, for taxpayers over 65, they receive an additional $1,300 for their standard deduction.
MEDICAL EXPENSE THRESHOLD INCREASES
For the 2019 tax year, the medical expense threshold will return to 10% of your adjusted gross income (AGI), compared to 2018’s 7.5% AGI. Therefore, you will need more medical expenses to qualify for the deduction.
Here’s an example: Allie’s adjusted gross income is $30,000, she needs to be able to deduct more than $3,000 in medical expenses in order to be eligible for the deduction. Compared to 2018, Allie would have been able to deduct her expenses if they exceeded $2,250.