2019 Tax Changes, Part 1
Since this is my first post for the new year, I thought I would do a multi-part series on “What’s new for 2019,” which will discuss a roundup of tax changes going into effect this year. Click here for Part 2.
1Medical expenses harder to deduct: For 2018, you could deduct unreimbursed medical and dental expenses if they exceeded 7.5% of your adjusted gross income (AGI). In 2019, this threshold rises to 10% of AGI.
2Big shift in alimony rules: For payments as part of a divorce agreement or judgement occurring after 2018, the deduction for alimony is eliminated. Recipients will no longer have to include them in income.
3No more penalty for failing to have minimum essential coverage: Under the ACA, individuals were penalized for not having sufficient health insurance that provided minimum essential coverage. This penalty becomes zero in 2019. However, the employer mandate remains. That mandate requires that an employer that employed an average of 50 full time employees during the calendar year, is required to pay an assessment if they don’t offer health coverage to its full time employees.
4There is some liberalization for hardship distributions (paid before they reach age 55.5) from qualified plans if there is a heavy financial need by the employees. See your tax professional about this.
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