Now that the 2019 tax season is underway, a review is in order for the new changes that have been implemented this year for the previously-passed HR1, informally known as Tax Cuts & Jobs Act. HR1 had substantially increased standard deduction amounts in 2018 ($6,500 to $12,000) for individuals, which is now $12,200 in 2019. Married couples in 2018 also saw a dramatic change (from $12,000 to $24,000), which is now $24,400 in 2019. However, with the updated tax code, there are a number of itemized deductions that have been changed or eliminated.
- State and Local Tax (SALT) deductions remain in place for 2019, with the total amount claimed for all state and local sales, income, and property taxes together may not exceed $10,000 ($5,000 for married taxpayers filing separately).
- Medical and dental expenses can be deducted from Schedule A - the threshold for 2019 is 10% of Adjusted Gross Income (AGI).
- Mortgages taken out after December 15, 2017 used to buy, build or improve homes (known as acquisition indebtedness) are limited up to $750,000 ($375,000 for married filing separately) while those taken out before December 15, 2017 are still grandfathered to the $1,000,000 limit. There is no deduction available for interest on home equity indebtedness from 2018 through 2025.
Please feel free to call or reply with any questions you might have. All The Best!
