We recently finished filing the final extended tax returns for our clients, and now it is time to start looking toward the 2019 tax filing season. (No rest for the weary!) With all the changes that took place for the 2018 filing season with the passage of the Tax Cuts and Jobs Act (TCJA), you’d think there wouldn’t really be many changes in the upcoming year. And while there are definitely fewer, here are a few things you need to know.
- 1040: Half of the new schedules that were added in 2019 have been dropped or combined with others to (somewhat ) simplify the form. They also moved the signature line back to the bottom of the form, so it appears on the same page as the final tax numbers.
- Medical Expense deduction: The threshold reverts back to 10% for the 2019 tax year, up from 7.5% for 2017 and 2018. There is a chance that Congress will extend the 7.5%, but it hasn’t happened yet.
- Health Insurance: There is no longer a penalty for not having health insurance, so the 2019 form doesn’t ask if you do.
- Alimony: Starting in 2019, the person paying alimony can no longer deduct it and the person receiving it doesn’t have to pay tax on it. This only applies to divorces that are finalized after December 31, 2018.
Of course, there are other changes and forms to consider as well, but these are a few of the highlights. And keep in mind, anything can change, particularly when it comes to taxes. We do, however, expect this year will be a little less stressful for most people since it will be the 2nd year the TJCA will be in effect.
2020 will be here before we know it, so start looking at your tax situation now so you can make any necessary adjustments before the end of the year. And as always, we are here to help!