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IRS Announces 2019 Tax Rates for Individuals
January 07, 2019There are a number of changes to individual tax figures that you’ll want to read up on. This includes updates to the AMT, retirement contributions and more.
The IRS announced various tax figures that will apply to individual taxpayers in 2019. Here’s an overview of what’s changing.
Updated Tax Brackets and More
Many tax figures for individuals are tied to inflation and, therefore, are adjusted annually based on the cost of living. First and foremost, the ordinary-income tax brackets will change slightly in 2019.
2019 Ordinary-Income Tax Brackets
| Tax Rate | Single | Head of Household | Married Filing Jointly/ Surviving Spouse | Married Filing Separately |
|---|---|---|---|---|
| 10% | $0- $9,700 | $0- $13,850 | $0- $19,400 | $0- $9,700 |
| 12% | $9,701 - $39,475 | $13,851 - $52,850 | $19,401 - $78,950 | $9,701 - $39,475 |
| 22% | $39,476 - $84,200 | $52,851 - $84,200 | $78,951 - $168,400 | $39,476 - $84,200 |
| 24% | $84,201 - $160,725 | $84,201 - $160,700 | $168,401 - $321,450 | $84,201 - $160,725 |
| 32% | $160,726 - $204,100 | $160,701 - $204,100 | $321,451 - $408,200 | $160,726 - $204,100 |
| 35% | $204,101 - $510,300 | $204,101 - $510,300 | $408,201 - $612,350 | $204,101 - $306,175 |
| 37% | Over $510,300 | Over $510,300 | Over $612,350 | Over $306,175 |
The tax rates and brackets were modified slightly under the Tax Cuts and Jobs Act (TCJA). But, in 2026, the rates and brackets are scheduled to return to pre-2018 levels (adjusted for inflation).
The TCJA also increased the thresholds at which the alternative minimum tax (AMT) kicks in. For 2019, the following thresholds will apply for the AMT.
2019 AMT Brackets
| Tax Rate | Single | Head of Household | Married Filing Jointly/ Surviving Spouse | Married Filing Separately |
|---|---|---|---|---|
| 26% | $0 - $194,800 | $0 - $194,800 | $0 - $194,800 | $0 - $97,400 |
| 28% | Over $194,800 | Over $194,800 | Over $194,800 | Over $97,400 |
In addition, personal and dependency exemptions were temporarily suspended and the standard deduction was nearly doubled under the TCJA. This may cause fewer individuals to itemize deductions or lead to itemized deduction “bunching” in alternating tax years. For 2019, the standard deduction will be:
- $12,200 for single people and married couples filing separately,
- $18,350 for heads of households, and
- $24,400 for married couples filing jointly.
In 2026, these amounts are scheduled to return to pre-TCJA levels, unless Congress extends them. Other updated tax figures include the following:
- $265 is the monthly limit for qualified transportation fringe benefits or qualified parking benefits for 2019.
- $2,700 is the limit on employee salary reductions for contributions to health Flexible Spending Arrangements for 2019.
- $116,000 – $136,000 is the 2019 MAGI phaseout range for joint filers for the Lifetime Learning Credit; $58,000 – $68,000 is the 2019 MAGI phaseout range for other filers.
- $105,900 is the foreign earned income exclusion amount for 2019.
- $11.4 million is the unified gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption for 2019.
- $15,000 is the annual exclusion for gifts made in 2019; this amount was the same for 2018.
There is no penalty for failing to maintain minimum essential health coverage for 2019.
Retirement Contributions
The limits on contributions to some retirement plans are also increasing. For example, the 2019 limits on elective deferrals and contributions to:
- 401(k), 403(b), 457(b)(2) and 457(c)(1) plans will increase to $19,000.
- Defined contribution plans will increase to $56,000.
- SIMPLEs will increase to $13,000.
- Traditional and Roth IRAs will increase to $6,000.
However, catch-up contributions to these retirement plans for people age 50 or older will remain the same in 2019 as they were in 2018, at $6,000.
For More Information
Got questions about your personal tax situation? Contact our Tax Services Team. Also check out our 2018 Year-End Tax Planning Guide for Individuals, which provides a detailed overview of the TCJA provisions that will impact you in 2018 and beyond.
The TCJA…So Many Changes, So Many Questions…we can help you navigate this huge tax overhaul! Visit our Tax Reform Center for everything you and your business need to know, now.
