The Internal Revenue Service (IRS) obligingly publishes a list of updated figures and inflation adjustments each November, scheduled to go into effect at the first of the year.
The IRS increases the income perimeters for each tax bracket annually. This means you can earn a little more than you did last year without paying a greater percentage of taxes…but don’t get too excited. The difference is just a few hundred dollars in some cases.
2019 Standard Deductions and Personal Exemptions
Personal exemptions were eliminated under the terms of the TCJA and that doesn’t change in 2019—you still can’t claim them for yourself or any of your dependents. But the amount of standard deductions has increased just a bit, as it generally does each year to keep pace with inflation. The standard deductions for 2019 are:
$12,200: Single taxpayers (up from $12,000)
$12,200: Married taxpayers filing separate returns (up from $12,000)
$24,400: Married taxpayers filing joint returns (up from $24,000)
$24,400: Qualifying widow(er)s (up from $24,000)
$18,350: Heads of household (up from $18,000)
Changes to 2019 Tax Credits
The earned income tax credit, the one designed to help low-income taxpayers by putting some refunded money into their pockets is almost invariably adjusted for inflation on an annual basis. Maximum credits are based on both income and the number of children you’re supporting as dependents. They’re set at the following figures in 2019:
$6,557 for three or more children
$5,828 for two children
$3,526 for one child
$529 if you have no children
We’re not done quite yet. Congress has one last gift for taxpayers in 2019—the repeal of the shared individual responsibility penalty payable by those who neglected to purchase health insurance coverage under the terms of the Affordable Care Act (ACA). Yes, that nasty penalty is gone, although the ACA is still alive and well. You won’t have to cough up your hard-earned dollars anymore if you don’t have coverage. The penalty was $695 in 2018. So go ahead and treat yourself to something healthy that won’t have you visiting the doctor.