Make Next Year’s Tax Preparation Easier
Now that you have filed your 2018 tax return, it is time to start working on your taxes for next year. Doing so now could make things much less painful later. Here are the most significant tax changes for 2019, as well as a few things you can do to prepare for your next return.
Cancellation of mandate penalty for no health insurance: Those who do not have health coverage and could not qualify for an exemption, will not have to pay a penalty for 2019.
No deduction for spousal support payments: A spouse who gets divorced and pays alimony in 2019 will no longer be allowed to claim a deduction for spousal support payments.
Health savings accounts: HSA contribution limits will increase from $3,450 to $3,500 for singles, and $6,900 to $7,000 for families.
Higher standard deductions: These deductions will rise by $200 to $400 depending on the type of filing ($12,200 for single filers, $24,400 for married joint filers, $18,350 for heads of households, and $12,200 for married separate filers).
Income Brackets: Brackets will be slightly higher due to adjustments for inflation.
Retirement account contribution limits: You will be able to increase your contributions for 401(k)s to $19,000. Individual retirement accounts limits will increase to $6,000.
Medical expenses. The threshold for medical and dental expenses will inflate from 7.5 percent to 10 percent of adjusted gross income, thus making it more difficult to qualify for this deduction.
What you can do to prepare
Meet with your tax professional to become familiar with tax law changes and determine whether you should change your tax withholdings. If you are self-employed, your tax professional can help you plan your estimated taxes, and advise you how to keep records of your deductible expenses.
Meeting with your tax professional to tax plan may save you thousands on future taxes. If you are our client, contact us to receive free tax planning advice.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.scvprotaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.
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