What's New for 2019
The filing season opens January 27, 2020. If you receive your documents and wish to bring them or drop them off, you may do so. The IRS deadline is April 15, 2020. We recommend you upload your documents here or drop your documents off as early as possible to avoid extensions. Although extensions sometimes may be necessary, the IRS and will still impose late payment penalties for those that have a tax liability after April 15, 2020.
The standard deduction has nearly doubled to $12,200 (Single), $24,400 (Married Filing Joint), and $18,350 (Head of Household). You may still itemize your deductions if they are higher than the standard deduction although there are still some limits on itemized deductions this year.
Child Tax Credit:
This credit has been doubled to $2,000 per eligible dependent child. The income limits to qualify have also been increased to $200,000 ($400,000 for MFJ). If your dependent child is under 17 on December 31, 2018, you may qualify for this credit, of which up to $1,400 may be refundable.
The 2018 TCJA law repeals the personal exemption for yourself, spouse and dependents under 17. However, you may still qualify for a $500 “Credit for other dependents” for dependents over 17, including college students, children with ITIN’s or older dependents such as parents.
State, Local and Property Taxes:
If you itemize, the limit on deducting the aggregate total of state, local AND property taxes is limited to $10,000 annually. Any amounts over this is not deductible.
HELOC and 2nd Mortgage Interest:
Originally repealed for 2018, Congress has modified the deduction for mortgage interest on home equity lines and 2nd mortgages. If the funds were used to buy, build or substantially improve your primary or second home, you may be able to deduct it. We will need to know when and for what purpose the funds were used in order to determine the deductibility of this interest.
Unreimbursed Employee Business Expenses:
If you are a W-2 employee and deduct unreimbursed business expenses (mileage, per diems, tools, union dues, uniforms, etc.), this deduction is no longer available. If you incur a lot of these expenses, you need to discuss the use of an accountable plan with your employer to be reimbursed directly for these types of expenses.
529 Savings Plans:
Ohio has doubled the state-level tax deduction from $2,000 per beneficiary to $4,000 per beneficiary. This is a great savings option for parents, grandparents and family to save for a child’s future education needs tax free. Also, withdrawals may now be used for private and religious elementary and secondary education for tuition and materials (up to $10,000 per student per year). Please call our office for an appointment to discuss this savings investment option.
For tax year 2019, the penalty for not maintaining qualified health insurance has been repealed. However, if you have health insurance through the Marketplace, you are still required to report this on your tax return. We will require form 1095-A from the Marketplace to prepare your taxes.
Children/Student Tax Returns:
We strongly encourage that you do not allow your dependent children or college students to file their own returns this year. Allowing a child to file their own return, particularly a student, can cost the child and parent literally thousands of dollars in Education credits. This is extremely important if you have a child in college.
Traditional/Roth IRA Contributions:
You have until April 15, 2020 to contribute to your Traditional or Roth IRA accounts and have it apply to your 2019 tax return. The IRA contribution limits for 2019 are $6,000 ($7,000 if age 50 or older). These limits apply to Traditional and Roth IRAs. Please call us for an appointment to discuss your individual limits for contributing and how they will affect your tax return.