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Reminder of 2019 Federal Tax Changes

December 11, 2019

As the 2020 filing season rapidly approaches here is a reminder of the provisions that go into effect, what is new and provisions that have been adjusted for inflation for 2019.

Provisions that go into effect beginning in 2019:

  • Alimony for Divorce settlements finalized after 2018 (2019 and later) are
    • Not deductible by the payor spouse
    • Not taxable income to the receiving spouse
  • ACA Individual penalty no longer applies. Therefore individuals that did not have health insurance for all or part of 2019 will no longer be subject to a penalty on their federal return
  • Medical expense threshold on Schedule A
    • 10% of AGI for all taxpayers

New for 2019

  • Virtual Currency Question on Form 1040, Schedule 1
    As part of the IRS effort to make taxpayers that have had dealings in virtual currency of the possible tax consequences that are involved, the IRS added a virtual currency question to the top of Form 1040, Schedule 1:

    At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?

    The IRS explains when a taxpayer should answer this question Yes. If the taxpayer has used virtual currency during 2019 they should look at the following IRS webpages to determine if they need to report any income or transactions on their 2019 federal return:

  • Form 1040SR (US Return for Seniors)
    This new version of Form 1040 that was mandated by the Tax Cuts and Jobs Act, highlights are:
    • For taxpayers 65 or older
    • Has larger font size and removed shading around some boxes to improve the readability for taxpayers with declining vision
    • Includes the Standard Deduction table at the bottom of page 1
      • Shares the 1040 instructions

Changing or Inflation adjusted provisions in 2019:

  • Standard Deduction
    • MFJ: $24,400
    • Single: $12,200
    • Head of Household: $18,350
  • Federal Mileage Rates
    • 58 cents per mile – Business
    • 20 cents per mile – Medical and moving
    • 14 cents per mile – charity
  • Retirement contribution limits
    • IRAs - $6,000 ($7,000 for taxpayers over 50)
    • 401(k), 403(b) or 457 plans - $19,000 ($25,000 for taxpayers over 50)

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IRS Identity Theft Resources
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Kiddie Tax Change and Form 8615
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IRS Expands Their Identity Protection PIN (IP PIN) Program
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2019 Federal Return and the Affordable Care Act
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Additional Updates
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