Do you know about the 2019 tax changes?

  1. Beginning in 2019 there is no longer a Federal individual mandate penalty for failure to have some form of health insurance which was formerly introduced by the Affordable Care Act. However, some states still have penalties, namely New Jersey, Massachusetts, and Washington D.C.
  2. Retirement contribution limits are increased:
    • 401(k) base contribution is increased to $19,000
    • 401(k) catch-up contribution for age 50 participants remains at $6,000
    • IRA base contributions (for both Traditional and ROTH) is up to $6,000
    • IRA catch-up contributions remain unchanged at $1,000
  3. HSA Contribution limits increase. For those with high-deductible plans that qualify under regulations, changes are as follows:
    • Self-only coverage is now $3,500 from $3,450
    • Family coverage is now $7,000 from $6,900
  4. Medical expense deduction threshold – For the past two years the threshold for medical expenses was 7.5% of adjusted gross income. Beginning in 2019, in order for medical expenses to be deductible they must be in excess of 10% of adjusted gross income.
  5. Beginning this year, alimony payments tied to any divorce or separation agreement that is made or modified in 2019 or thereafter are no longer deductible.
  6. New forms for 2019:
    • Form 1040 will look more like 2017 Form 1040 with less lines. Form 1040 for 2018 was very confusing.
    • Form 1040-SR tax form for seniors which is easier to read and includes a standard deduction chart.
    • Form 8995 and 8995-A used to calculate the qualified business income deduction. Form 8995 is the simplified version. Form 8995-A for more complicated situations.