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Tax Time is around the Corner

Posted on December 16, 2019 in Firm News

Here is a quick update on the 2019 deductions, credits and contribution limits for some common tax items.  The 2019 standard deduction for a single person is $12,200, for Head of Household, $ 18.350 and for Married Filing Jointly, $24,400.  The new standard deductions available have resulted in many more taxpayers using the standard deduction as it is more than their allowable itemized deductions.

The base contribution rate to an IRA is $6,000 with the catch up amount for those over age fifty being an additional $1,000.  The base contribution to a 401(k), 403(b) or a 457 Plan is $19,000 with the additional catch up contribution for those over fifty being an additional $5,000.  Taxpayers have until April 15, 2020 to make contributions to their IRA accounts for tax year 2019.

The forms for 2019 have changed once again.  The six additional schedules introduced last year have been condensed into three.  There are two new schedules to be used to calculate the Qualified Business Income Deduction.  It is expected that the IRS will begin accepting returns for filing the last week of January 2020.

New for 2020:  For those Taxpayers who are self – employed or who issue 1099 forms to independent contractors; the Form 1099 – Misc. will no longer be the reporting form.  Instead these payments will be reported on the new Form 1099- SE.