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IRS announces new tax rules for 2019

On Behalf of | Nov 28, 2018 | Income Taxes

Taxpayers throughout Georgia and the rest of the country now know what the tax brackets will be for the 2019 tax year. Individuals who make up to $9,700 will be in the 10 percent tax bracket, which is the lowest of the seven income tax tiers. Individuals who have a taxable income of $510,301 or more will pay at the highest 37 percent rate. Those who are married filing jointly will be in the 37 percent bracket if they make $612,351 and up.

Individuals will see their standard deduction increase to $12,200 up from $12,000 while married couples will get a standard deduction of $24,400. There is no personal exemption as they were eliminated through 2025.

Those who have a 401(k) or IRA can contribute more to their accounts in 2019. The contribution limit for a 401(k) is $19,500 for savers under the age of 50. Savers who are 50 or older can contribute an extra $6,000 to their plans.

Individuals can now make IRA contributions of up to $6,000 in 2019, and anyone who is 50 or older can put in another $1,000. For anyone who doesn’t have a qualifying health insurance policy in 2019, there will be no penalty to pay. In recent tax years, the IRS levied a fine of $695 for not carrying acceptable coverage.

Individuals who fail to pay their federal income taxes could be audited by the IRS. An audit could result in both civil and criminal penalties. Therefore, it may be a good idea to have an attorney review the case and represent a taxpayer in talks with the government. This may help a taxpayer receive a favorable outcome in the matter, which may mean that there is no change to an individual’s income tax return.