Now that we are in the last month of the year, let’s dive into the new changes in the 2020 Filing Season for 2019 Tax Returns.
- Seniors, age 65 and older, will have their very own tax return called 1040-SR. This form allows seniors to claim the standard deduction or itemize their deductions on Schedule A as before. There will be “zero” income limits or restrictions on the type of income reported.
- Standard Deduction: There will be an increase in the standard deductions from 2018 taxes. The idea of the increased standard deduction will allow individuals to file without itemization on Schedule A.
Single & Married Filing Separate (MFS) $12,200
Head of Household $18,350
Married Filing Joint (MFJ) $24,400
- ACA Penalty: The individual mandate will not be enforced for the 2019 Federal Tax return. Some states may require you to have insurance, but *North Carolina will not enforce a penalty. *(Charlotte Observer 12/26/17) As of right now, Massachusetts, New Jersey, and DC are the only ones with health insurance mandates.
- Medical Expenses Schedule A: The medical expense threshold will increase from 7.5% to 10%.
- Alimony Deduction Eliminated: Couples that have signed divorce documents after 12/31/18 that require alimony payments will no longer have to claim the payment as income. The payer can no longer claim the alimony as an expense.
- 401k Contributions: These limits have increased from $6,000 to $19,000 for taxpayers over age 50 to decrease their taxable income. IRA Contributions have also increased to $6,000.
- HSA Contribution: The HSA limits will increase as well to $3,500 for self-coverage and $7,000 for family coverage.
If you have any questions, please contact me at (704) 526-0307 or firstname.lastname@example.org for a free consultation and to set your appointment. Mays Concepts LLC, Remember, You Can Count On Me!