Tax Cuts & Jobs Act (TCJA)

Rate Single Married Filing Jointly
10% $0 - $9,525 $0 - $19,050
12% $9,526 - $38,700 $19,051 - $77,400
22% $38,701 - $82,500 $77,401 - $165,000
24% $82,501 - $157,500 $165,001 - $315,000
32% $157,501 - $200,000 $315,001 - $400,000
35% $200,001 - $500,000 $400,001 - $600,000
37% > $500,000 > $600,000
  • $12,000 for single and married filing separately
  • $24,000 for married filing jointly
  • $18,000 for head of household
  • Medical expenses will be deductible if they exceed 7.5% adjusted gross income
  • State and local taxes are now capped at $10,000
  • Interest on mortgages are fully deductible up to $750,000 on primary and secondary residences if purchased or refinanced after December 14, 2017
  • Miscellaneous deductions that exceed 2% adjusted gross income are no longer deductible they include:
    • i. Unreimbursed job expenses
    • ii. Investment expenses
    • iii. Tax preparation fees
    • iv. Fees to fight the IRS
    • v. Hobby expenses
  • Casualty losses will only be deductible if they occur in a federal disaster area. The previous limitations if the loss is deductible still apply the same as in prior tax years.
No, depending on what state you live in you will want to check to see if your home state conforms to any of the TCJA. There will be cases where you will be taking the standard deduction on the federal tax return and will be itemizing on the state tax return.
The Child Tax Credit has doubled from $1,000 to $2,000 per child and the refundable portion is now up to $1,400 per child. The income phaseout range now begins at $200,000 for single and $400,000 for married filing joint. Additionally, there is a $500 nonrefundable credit for dependents that do not meet the IRS definition of a qualifying child.
The new deduction also known as a Section 199A deduction is up to an additional 20% deduction on qualified business income from sole proprietorships and pass-through entities. Limits are based on income and type of business.
QBI is the net amount of qualified income, gain, deduction, and loss. Only taxable items are counted, and only apply to U.S. businesses.
Yes, the deduction has been eliminated for expenses related to entertainment, amusement, or recreation. However, food and beverage for the taxpayer or employee of the taxpayer present at the meeting will continue to be 50% deductible as long as the food or beverage are not lavish or extravagant.
Yes, the TCJA has increased the Section 179 limit from $500,000 to $1million for 2018. The new law expanded the definition of property allowed to qualified improvement property.

Retirement

Type of Contribution 2019 2018
Defined Contribution maximum employee elective deferral (401(k), 403(b)) $19,000 $18,500
Employee catch-up contribution (if age 50 or older by year-end) $6,000 $6,000
Defined contribution maximum limit, all sources (includes maximum profit sharing) $56,000 $55,000
Defined Benefit Plan $225,000 $220,000
Traditional and Roth IRA Plans $6,000 $5,500
IRA Catch-up contribution (if age 50 or older by year-end) $1,000 $1,000
SEP IRA $56,000 $55,000
SIMPLE IRA $13,000 $12,500
SIMPLE catch-up contribution (if age 50 or older by year-end) $3,000 $3,000
April 15, 2019
According to the IRS, you must deposit contributions for a year by the due date (including extensions) for filing your federal income tax return for the year. If you obtain an extension for filing your tax return until October 15, you have until the end of that extension period to deposit the contribution, regardless of when you actually file the return.
An individual who is at least 70.5 may exclude their retirement distribution from income up to $100,000 if they directly send there funds to a charity. Qualified charitable distributions (QCD) must be made directly from the IRA trustee to the public charity, distributions may not be made to private foundations, donor advised funds, charitable remainder trusts, or charitable annuities. Distributions from SIMPLE or SEP IRAs may qualify, but distributions from 401k and other employer-sponsored retirement plans do not.
In most cases no. An amount distributed out of an IRA or other qualified plan must be contributed (rolled over) into another IRA or qualified plan within 60 days. There are also other limited exceptions to the 10% additional penalty for distributions, medical, and for first time homebuyers.
Form 8606 should be filed annually with your tax return if a taxpayer has made any nondeductible contributions to a traditional IRA, and should continue to be filed every year after even if a contribution was not made during that year. Taxpayers should keep copies of these forms as evidence to show the IRS in case of audit.
A backdoor Roth IRA allows you to get around income limits by converting a Traditional IRA into a Roth IRA, which for 2019 are $137,000 for single, and $203,000 for married filing jointly. Contributing directly to a Roth IRA is restricted if your income is beyond certain limits, but there are no income limits for conversions. The amount of money you can contribute to a Roth IRA is normally limited, but a backdoor Roth IRA has no limits on the amount of the conversion.
  1. Verify there are no other pre-tax (deductible) IRAs
  2. If there are, roll over existing pre-tax IRAs to a 401(k) (if available) to avoid the IRA aggregation rule
  3. Contribute to non-deductible IRA (if eligible)
  4. Invest funds in the non-deductible IRA
  5. Convert to Roth IRA
  6. You can repeat steps 2-4 annually
Phaseout Single Married Filing Jointly Married Filing Separately Non-Active Participant Married To Active Participant
IRA deduction phaseout for active participants $64,000-$74,000 $103,00-$123,000 $0-$10,000 $193,000-$203,000
Roth IRA phaseout $122,000-$137,000 $193,000-$203,000 No Option No Option

Investment

Long-Term Capital Gains Rate Single Taxpayers Married Filing Jointly Head of Household Married Filing Separately
0% Up to $38,600 Up to $77,200 Up to $51,700 Up to $38,600
15% $38,600-$425,800 $77,200-$479,000 $51,700-$452,400 $38,600-$239,500
20% Over $425,800 Over $479,000 Over $452,400 Over $239,500