Moving 17¢ / mile (disallowed except for military)
Charitable 14¢ / mile
Things that can impact this 2019 tax year’s tax return:
The 2020 tax filing season will begin on Monday, January 27th. Any returns claiming the EIC (Earned Income Credit) will not be processed before (we will not know until February 15th).
The due dates on Federal schedule 1040’s are April 15, 2020. Also, form 1065 and 1120 are now due on March 15th, 2020.
Federal Rates and Limits 2019
FICA Social Security (OASDI) Wage Base $132,900
Medicare (HI) Wage Base No Limit
Social Security (OASDI) Percentage 6.2% Medicare (HI) Percentage 1.45% (2.35% for individuals earning over $200,000)
Maximum Employee Social Security (OASDI) Withholding $8,239.80
Maximum Medicare (HI) Withholding No Limit
Maximum Amount of Earnings to Still Receive Full Benefits Under Full Retirement Age $17,640
Amount of AGI Causing SS Benefits to be Taxable (85%)
Married/Filing Jointly $44,000
If you are younger than full retirement age and make more than the yearly earnings limit, your earnings may reduce your benefit amount. (Full retirement age is 66 for people born between 1943 and 1954. Beginning with 1955, two months are added for every birth year until the full retirement age reaches 67 for people born in 1960 or later.)If you are under full retirement age for the entire year, deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2020, that limit is $18,240. In the year you reach full retirement age, deduct $1 in benefits for every $3 you earn above a different limit. In 2020, the limit on your earnings is $48,600 but only count earnings before the month you reach your full retirement age. (from SSA.gov)
Retirement Contributions Maximum Elective Deferral to 401(k) and 403(b) $19,000
Maximum Elective Deferral to SIMPLE IRA Plans $13,000 Maximum Annual
Contribution to Defined Contribution Plans Lesser of 100% of compensation or $54,000
Maximum Annual Contribution to Keogh or SEP-IRA $56,000
Maximum Annual Compensation Taken into Account for Contributions $280,000
Threshold Amount for (Individuals at least age 50 by EOY)
401(k) Plans $6,000
SIMPLE Plans $3,000
2019 Tax Law Updates
Things that will affect your 2019 tax return:
Standard Deduction: Increased to $12,200 for single taxpayers, $18,350 for head of household and $24,400 for married couples.
Dependent Exemption: Eliminated
State, local and property taxes: They are now been limited to $10,000. (Schedule A)
New tax brackets are now in effect: 10%, 12%, 22%, 24%, 32%, 35%, 37%. This will reduce your overall taxes by anywhere from 1%-4% depending on your income levels, filing status, etc.
Capital Gains and Dividends: No change
Estate Tax: You can pass your heirs up to $22 million tax-free (for married couples). This doubled the former $11 million estate tax limit.
S-Corporations, partnerships, LLC’s and sole proprietors: The majority of these companies get to deduct 20% of their income tax-free.
AMT: The final bill raised the threshold to $500,000 for individuals and $1,000,000 for married couples (Note: some families in the $200,000-$500,000 income range may end up paying this tax, but it will be greatly reduced compared to prior years).
Mortgage Interest: Under the new tax law, homeowners can only deduct interest they pay on home mortgage debt less than $750,000, down from the former cap of $1,000,000.
Child Tax Credit: This credit has been doubled to $2,000 per child, $1,400 of this credit is refundable even if you do not have any tax liability.
The Tax Bill suspends all miscellaneous itemized deductions that are subject to the 2% floor under present law. This includes the following deductions that an employee had been permitted to deduct under current law:
Casualty and theft losses from property used in performing services as an employee;
Business bad debt of an employee;
Business liability insurance premiums;
Damages paid to a former employer for breach of an employment contract;
Depreciation on a computer a employee’s employer requires him or her to use in his or her work;
Dues to a chamber of commerce if membership helps the employee perform his or her job;
Dues to professional societies;
Home office or part of a employee’s home used regularly and exclusively in his or her work;
Job search expenses in the employee’s present occupation;
Legal fees related to the employee’s job;
Licenses and regulatory fees;
Malpractice insurance premiums;
Medical examinations required by an employer;
Passport fees for a business trip;
Research expenses of a college professor;
Subscriptions to professional journals and trade magazines related to the employee’s work;
Tools and supplies used in the employee’s work;
Costs for travel, transportation, meals, entertainment, gifts, and local lodging related to the employee’s work;
Union dues and expenses;
Work clothes and uniforms if required and not suitable for everyday use; and
Work-related education.The Tax Bill suspends all miscellaneous itemized deductions that are subject to the 2% floor under present law. This includes the following deductions that an employee had been permitted to deduct under current law.