2019 Tax Guide: What You Need To Know This Year

Burst/Sarah Pflug

Tax season 2019 is officially in full swing. You should be receiving your tax forms from your employer soon (if you haven’t already). Keep an eye out for other important tax forms from your health insurance provider, retirement account manager, college or university, loan company and more, too. Once you have them all, you can make an appointment with an accountant or file online yourself by the deadline — April 15, 2019. But don’t file before considering the changes that were made to the 2018 tax bill, outlined below in our 2019 tax guide.

When was the tax bill changed?

In December 2017, Republican lawmakers passed a tax bill that changed a lot of what we’ve come to know over the past few years. These changes went into effect in January 2018 and are now affecting the way you file your taxes in 2019. Make a note now, though — some things may change again in the coming years.

What do I need to know before filing my taxes this year?

The tax brackets: There are still seven tax brackets, but the top rate is lower than it was, now sitting at 37 percent instead of 39.6 percent. There were also a few adjustments to the other brackets for both single filers and those who are married, filing jointly:

Data Source: U.S. Tax Center, IRS.com

Standard deductions: The standard deduction for single filers used to be $6,350. Now, it’s $12,000. The standard deduction for those filers who are married, filing jointly, used to be $12,700. Now, it’s $24,000.

Child tax credit: The child tax credit used to be $1,000. Now, it’s $2,000. Taxpayers may also receive a tax credit of up to $500 for other dependents who are not children.

Mortgage interest and property taxes: Before the tax bill changed, homeowners used to be able to deduct up to $1 million in mortgage interest across multiple homes. Now, it’s up to $750,000 instead ($375,000 if married and filing jointly). Additionally, home equity loan interest is no longer deductible at all. For taxes, the rule used to be that you could generally deduct your state and local income and property taxes from your taxable income. Now, the rule says you can only deduct up to $10,000 total ($5,000 if married and filing jointly).

Medical expenses: For 2018 taxes, which you’re filing in the 2019 tax season, you can deduct premium medical expenses that exceed 7.5 percent of your adjusted gross income (AGI). However, for 2019 taxes and beyond, which you’ll start filing in 2020 and beyond, that amount will go back up to 10 percent, which is what it was before the tax bill changed.

Health insurance mandate: It used to be that you were required to have health insurance (unless you were exempt), or you’d pay a penalty. Now, that penalty is reduced to $0, which means if you don’t have health insurance, you won’t have to pay for it.

Investment fees: You used to be able to deduct the fees you paid an investment or financial advisor if it equaled 2 percent or less of your AGI. Now, this deduction is no longer valid. It may be valid again in 2025.

Unreimbursed business expenses: Under the old tax bill, you used to be able to deduct unreimbursed business expenses (things your employer wouldn’t cover for you) up to 2 percent of your AGI. This is no longer valid, though it may be again in 2025.

Pexels/Bruce Mars

Moving expenses: Before the changes, if you moved for a job, you’d be able to deduct those expenses as long as the workplace was 50 miles further away from your previous residence. Now, this is only valid for members of the military, though restrictions may still apply.

Losses for fires or floods: You used to be able to deduct losses from fires, floods, burglary or other similar events if those losses each cost more than $100 and they totaled more than 10 percent of your AGI. Now, those losses may only be deducted if they were lost in an event that the president determines a “disaster.”

Tax preparation fees: You used to be able to deduct the amount you paid for getting your taxes done — whether with an accountant or a software service like TurboTax. Now, this is no longer valid.

Bicycle transportation for work: If you rode a bike to work before the tax bill was changed, you used to be able to deduct up to $20 per month as long as your employer didn’t provide any other transportation benefits. Now, this is no longer valid.

Gambling losses: You used to be able to deduct gambling losses up to the total amount of your gambling winnings. Now, those gambling losses must also include expenses like traveling to and from the casino before they can be compared to your gambling winnings, though this may change again in 2025.

Depending on your financial situation, you may be able to claim more tax credits and tax deductions, many of which were not affected by these changes to the tax bill. Whatever the case may be, consider all of the ways you can save money on your taxes every year. With a little bit of research and a lot of strategy, you can end up with a hefty tax return every spring.

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