Breaking News Updates

****IRS Announces Start Date For The New Tax Filing Season**** The Internal Revenue Service (IRS) has announced that tax season will open on Monday, January 27, 2020. The IRS will begin accepting paper and electronic tax returns that day. 2019 Changes that affect your filing Here are some things you should be aware of: Income tax brackets will increase in 2019 to account for inflation. The standard deduction will increase to $12,200 for single filers and $24,400 for married couples filing jointly. There will no longer be a penalty for not having health insurance coverage on your federal return. However, effective January 1, 2020 the State of California will impose a penalty monthly for not having adequate health insurance. Tax law changes in the Tax Cuts and Jobs Act affect almost everyone who itemized deductions on tax returns they filed in previous years.. One of these changes is that TCJA nearly doubled the standard deduction for most taxpayers. This means that many individuals may find it more beneficial to take the standard deduction. However, taxpayers may still consider itemizing if their total deductions exceed the standard deduction amounts. Here are some highlights taxpayers need to know if they plan to itemize deductions: Medical and Dental Expenses. The “floor” for medical and dental expenses rises to 10% (it was 7.5% in 2018), which means you can only deduct those expenses which exceed 10% of your AGI. State and Local Taxes. Deductions for state and local sales, income, and property taxes remain in place but are limited to a combined total of $10,000 ($5,000 for married taxpayers filing separately). Home Mortgage Interest. You may only deduct interest on acquisition indebtedness – your mortgage used to buy, build or improve your home – up to $750,000 ($375,000 for married taxpayers filing separately). Charitable donations. As a result of tax reform, the percentage limit for charitable cash donations to public charities increased from 50% to 60% in 2018 and will remain at 60% for 2019. Casualty and Theft Losses. The deduction for personal casualty and theft losses is repealed except for losses attributable to a federal disaster area. Job Expenses and Miscellaneous Deductions subject to 2% floor. Miscellaneous deductions, including unreimbursed employee expenses and tax preparation expenses, which exceed 2% of your AGI have been eliminated. Pease limitations For high-income taxpayers who itemize their deductions, the Pease limitations, named after former Rep. Don Pease (D-OH) used to cap or phase out certain deductions. There are no Pease limitations in 2019. Some additional tax credits and deductions were adjusted for 2019 or changed under the tax reform law. Here’s a look at a few of the most popular: Child Tax Credit. The child tax credit has been expanded to $2,000 per qualifying child and is refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents. Phaseouts, which are not indexed for inflation, will begin with adjusted gross income (AGI) of more than $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers. Earned Income Tax Credit (EITC). For 2019, the maximum EITC amount available is $6,557 for married taxpayers filing jointly who have three or more qualifying children. Phaseouts apply. You can check out Revenue Procedure 2018-57 (downloads as a pdf) for a table providing maximum credit amounts for other categories, income thresholds, and phaseouts. Adoption Credit. Despite rumors of the death of the adoption credit, it’s still in place. For 2019, the credit allowed for an adoption of a child with special needs is $14,080, and the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $13,810. Phaseouts apply. Student Loan Interest Deduction. Like the adoption credit, there were rumors that the student loan interest deduction had been shuttered: it was not. For 2019, the maximum amount that you can deduct for interest paid on student loans remains $2,500. Phaseouts apply for taxpayers with MAGI more than $70,000 ($140,000 for joint returns) and the deduction is completely phased out for taxpayers with MAGI of $85,000 or more ($170,000 or more for joint returns). Lifetime Learning Credit. For the 2019 tax year, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $116,000, up from $114,000 for tax year 2018. Medical Savings Accounts (MSA). For 2019, a high-deductible health plan (HDHP) is one that, for participants who have self-only coverage in an MSA, has an annual deductible that is not less than $2,350 but not more than $3,500; for self-only coverage, the maximum out-of-pocket expense amount is $4,650. For 2019, HDHP means, for participants with family coverage, an annual deductible that is not less than $4,650 but not more than $7,000; for family coverage, the maximum out-of-pocket expense limit is $8,550. Foreign Earned Income Exclusion. For tax year 2019, the foreign earned income exclusion is $105,900, up from $103,900 for tax year 2018. Shared individual responsibility payment The unpopular shared individual responsibility payment has been eliminated for the tax year 2019