Tax Updates

2019 TAX UPDATES AND REMINDERS

Majority of taxpayers will qualify for the Standard Deductions- $24,400 couples, $12,200 singles, $18,350 Head of Households. Filing Requirements:

  IRS Illinois
Single $12,200 ($1,650 more for 65 plus) $2,275
Married Filing Jointly $24,400 ($1,300 more for each spouse 65 or older) $2,275 each family member
Married Filing Separately $5 $2,275
Head of Household $18,350 ($1,650 more for 65 plus) $2,275 each family member
Dependent Child File Own Tax Earned Income > $12,200, or Unearned Income > $1,100 $2,275
     

Personal Exemptions were eliminated in 2018, however, the Child Tax Credit is $2,000 for each child under age 17 and $500 for each dependent older than 17 remains.

Health Insurance requirement has been discontinued for 2019. However, if you obtained insurance through the Marketplace commonly referred to as “Obamacare” insurance, you must present a 1095-A form for processing your personal tax return prepared for proper Premium Tax Credit calculation.

Real Estate Tax Bills with personal residence PIN are required to ensure proper credit of IL Property Tax Credit on Schedule ICR for Personal IL returns. The State of IL is checking on the PIN match and taxes paid to the county. If they cannot be verified, the credit is withheld by the state until proper documentation is provided.

State Withholding Tax and Real Estate Taxes are capped at $10,000 combined.  No interest deduction on Home Equity Loans if used to purchase cars or pay down credit card debt.

Job related moves, all miscellaneous deductions, employee business expenses including transportation, brokerage fees, hobby expenses, safety deposit box, tax preparation, theft losses and alimony for post 2018 divorce decrees … are not deductible.

Medical deduction threshold reversed back to 10% from 7.5% last year, example, if you have $50,000 taxable income, you will need over $5000 in medical expenses to be able to use a deduction.

529 College Plans now allow up to $10,000 distribution to pay for elementary or secondary education, but Illinois requires additional adjustment and documentation if a taxpayer uses an IL 529 plan to pay for elementary or secondary expenses.

Long-term capital gains taxes are now at 0%, 15% and 20% depending on the taxable income threshold.

C-Corporations tax rate is flat 21% and permanent.

S-Corporations and Schedule C businesses have a 20% Deduction for Pass-Through incomes referred to as Qualified Business Income.  If you had a QBI Loss in 2018, it will carry forward to 2019 and so on.

Late-Filing Penalty increases to $330 minimum and increases monthly.

SecureFilePro portal added for safe and convenient sharing of documents, access to 2019 & forward returns, etc.   Go to WWW.BANDRTAX.COM for more information.