Through the end of 2018, alimony payments have been deductible by the payor, and taxable to the recipient. For 2019, that threshold increases to 10% of AGI, further reducing that deduction.Ī major change will take place beginning in 2019. But if you do, you'll be able to itemize unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI). The final termination of the penalty doesn't take place until the 2019 tax year.ĭue to the large increases in standard deductions, fewer people will itemize their deductions from 2018 on. However, in one of the lesser known provisions of the new tax law, the penalty will continue to be in force for 2018. The new tax law is finally ending that penalty. One of the more controversial provisions of the ACA was the imposition of a penalty on consumers with no health insurance coverage. The elimination of the Affordable Care Act (ACA) penalty. Other changes taking place in 2019, without being indexed for inflation, include: The annual gift exclusion will be $15,000, unchanged from 2018. This is scheduled to increase from $11.18 million in 2018 to $11.4 million in 2019. The lifetime gift and estate tax exemption. However, catch-up contributions for taxpayers 50 and older have not been increased.įor 2019, retirement plan contributions will look like this: Just as is the case with the income brackets for ordinary income, the income brackets for capital gains have also been increased slightly from 2018.īase retirement contributions are increasing by $500 in 2019. The capital gains tax rate is substantially lower than the tax rate on a comparable amount of ordinary income. This is a major advantage for anyone who has substantial capital gains income. For example, while there are seven tax brackets for ordinary income, ranging from 10% to 37%, there are just three for capital gains, ranging from 0% to 20%.
The New 2019 Federal Income Tax Brackets and Rates for Capital GainsĬapital gains are taxed at different rates from ordinary income. Married Filing Jointly or Qualifying Widow
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