The Tax Cuts and Jobs Act (TCJA) of 2017 had several provisions that affect individual taxpayers. Many of these provisions are set to expire at the end of 2025, reverting back to pre-TCJA law.

The 2019 Fingertip Tax Guide reflects the tax changes related to the following:

• Individual income taxes
• Transfer taxes
• Business Taxes
• Retirement contribution limits, and more

2019 Income Taxes

The rates provided above are based on your taxable income. These are listed for the regular income tax. It is possible some taxpayers will be subject to the Alternative Minimum Tax (AMT) instead; taxpayers are responsible for paying the greater of the regular income or AMT.

Alternative Minimum Tax Exemption Amounts

Kiddie Tax

This applies to children ages 19 – 24 who are: (1) full-time students, (2) earned income doesn’t exceed 1/2 of their support, and (3) do not file a joint tax return.

Standard Deductions

Itemized Deduction Phaseout

Personal Exemption

Net Investment Income Tax Threshold

(3.8% Medicare Surcharge)

Medicare Tax Thresholds

(0.9% Additional Tax on Earned Income)

Qualified Plans

Contribution limits for Roth 401(k) plans are the same for regular 401(k) plans; an amount totaling $19,000 can be contributed in 2019 to one or both types of 401(k) plans.

Roth IRA Income Limits for Contributions

Capital Gains Tax

* Qualified Dividends are taxed the same as capital gains.

Long-Term Care

Social Security Benefits

(Maximum Annual Earnings Before Social Security Benefits are Reduced)

FICA Income Limits

(Maximum Compensation Subject to FICA Taxes)

Corporations

** This is subject to strict rules and testing requirements; the deduction is unavailable for professionals in specific service-oriented businesses when the income of the owner exceeds certain limits.

2019 Estate & Gift Taxes

Estate Tax Rates and Exemptions

Note: The Tax Cuts and Jobs Act of 2017 increased the estate, gift, and GST tax exemptions to $10 million (indexed for inflation). However, these exemptions amounts are set to expire and revert back to $5 million (indexed for inflation) after December 31, 2025. In November 2018, additional guidance and regulations were issued stating there would not be a “clawback” of any unified credit used before 2026 at the time the exemption reverts back to $5 million (indexed for inflation).

This material does not constitute tax, legal or accounting advice, and neither Mericle & Company or its employees are in the business of offering such advice. It cannot be used by any taxpayer for the purpose of avoiding any IRS penalty. It was written to support the marketing of the transaction or topics it addresses. Comments on taxation are based on Mericle & Company’s understanding of current tax law, which is subject to change. Anyone interested in these transactions or topics should seek advice based on his or her particular circumstances from independent professional advisors.