2020 tax filing season starts on Monday, January 27, 2020, when the IRS begins accepting and processing 2019 tax year returns. The deadline to file 2019 tax returns and pay any tax you owe is April 15. So, here are reminders about a dozen changes you must remember while filing taxes for 2019
1. Standard deduction increased
Standard deduction simplifies the life of a taxpayer. The standard deduction for the year 2019 is as under:
|Filing Status||Standard Deduction|
|Head of Household||$18,350|
|Married Filing Separately||$12,200|
|Married Filing Jointly||$24,400|
You can see tax brackets for tax year 2019
2. New Tax return for Senior Citizen
If you are aged 65 and older, you can use a simplified version of the Form 1040. Form 1040sr can be used by seniors without any income limit. Please read more here Form 1040SR
3. No Health Insurence Penalty
The Obamacare penalty for not buying health insurance gone from with the passing of GOP tax bill that repealed the individual mandate penalty, starting in 2019 (See Part VIII, Section 11081 of the text of the Tax Cuts and Jobs Act).
4. Simplified Tax Return for QBI
If you have Qualified Business Income (QBI) or, qualified real estate investment trust (REIT) dividends or qualified income from a publicly traded partnership (PTP), you get a new Form 8995, to report the computation for this year. For complex QBI , another form is available Form 8995-A
5.Alimony Deduction No More!
If the divorce decrees signed after 12/31/2018 that require alimony payments, the payer will not be allowed a deduction for payments made. Consequently, the payee also not be required to offer alimony as income on his/her respective tax returns.
6.Increased 401K ,IRA & HSA Contribution Limits
Three contribution limits increased for the tax year 2019 :
- 401K contributions limits have been increased to $19,000 and $6,000 for persons over age 50 making catch-up contributions.
- IRA contribution limits have also increased to $6,000 with a $1,000 catch-up amount for taxpayers over age 50.
- Health Savings Account (HSA) account contribution limits have increased to $3,500 self-coverage only and $7,000 for family coverage.
7.AMT Exemption Substantially Increased
The Alternative Minimum Tax (AMT) exemption amounts have been increased for inflation for 2019, making fewer taxpayers subject to AMT.