IRS just announced some inflation adjustments for 2019 regarding some deductions and credits. So if you are wondering what has changed, here is a partial list for next year:
- The standard deduction is going up $200 per person. Thus for married couples it will rise to $24,400 and for single people it will be $12,200.
- The amount of business equipment that you can elect to expense went up by $20,000, which will go to $1,020,000 for next year.
- You can pay your employees (and yourself if you are incorporated) $5 more for qualified parking and transportation tax free. The new number will rise to $265 per month.
- This is a big one: This year, if you don’t have essential health coverage under Obamacare, you will be penalized $695. Next year the penalty becomes zero.
- You can still give up to $15,000 to each person with no gift tax. This was the same amount in 2018 too. Thus, there is no change in this.
- If you are thinking of adopting a child, the maximum credit allowed for qualified adoption expenses went up from $13,810 in 2018 to $14080 next year.
- You can earn more money next year before the lifetime learning credit for educational expenses starts phasing out. The phaseout begins at $114,000 for 2018 and is $116,000 for 2019 of adjusted gross income.
- Slight increase for inflation to the amounts subject to each tax bracket.
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