There have been several major tax law changes over the past few years with staggered effective dates. These laws have significantly changed the way you may want to consider your financial situation, especially retirement planning. Here is some information that you find helpful:

Income Tax Rate Schedules for 2019

Table data for Income Tax Rates for 2019
 
2019 Single Return Rate Schedule 2019 Married Filing Jointly Return Rate Schedule Alert Me
Taxable Income Levels Tax Rate Taxable Income Levels Tax Rate Alert Me
0 to $9,700 10% 0 to $19,400 10%
$9,701 to $39,475 15% $19,401 to $78,950 15%
$39,476 to $84,200 22% $78,951 to $168,400 22%
$84,201 to $160,725 24% $168,401 to $321,450 24%
$160,726 to $204,100 32% $321,451 to $408,200 32%
$204,101 to $510,300 35% $408,201 to $612,350 35%
Over $510,300 37% Over $612,350 37%
Table data for 2019 Standard Deduction
 
2019 Standard Deduction Alert Me
Married couples filing a joint return - $24,400
Single return filers - $12,200
2019 Personal Exemption Amount - $0 - Personal exemptions were eliminated as of 1/1/18

2019 Taxation of Dividends and Long Term Capital Gains

Long term capital gains and qualifying dividends receive favorable tax treatment, based on taxable income levels.

Table data for 2019 Taxation of Dividends and Long Term Capital Gains
 
Tax rate on long term capital gains and qualifying dividends Taxable income levels for those filing individual returns Taxable income levels for those filing joint returns Alert Me
0% Under $39,375 Under $78,750
15% $39,376 to $434,550 $78,751 to $488,850
20% Over $434,550 Over $488,850

2019 Medicare Surtaxes

As part of the health care reform enacted in 2010, additional Medicare surtaxes began in 2013 for high income wage earners and high income investors. The surtaxes apply when a single taxpayer's Modified Adjusted Gross Income (MAGI) exceeds a threshold of $200,000 or joint return filers when their MAGI exceed $250,000.

  • For wage earners, an additional 0.9% Medicare surtax applies to wages (including bonuses and self-employment income) above the threshold amounts.
  • For investors, an additional 3.8% Medicare surtax applies to net investment income (taxable interest, dividends, capital gains, etc.) in excess of the thresholds.

Other Significant Income Tax Changes Effective 1/1/18

  • Passthrough income deduction - Individuals can deduct 20% of qualified business income from partnerships, S corporations or a sole proprietorship. This rule can be complicated and you may want to consult your tax advisor.
  • Mortgage interest - Interest can be deducted on up to $750,000 of on new acquisition mortgages, down from the old limit of $1 million. Beginning in 2018, no interest on home equity loans can be deducted.
  • State and local taxes - Beginning in 2018, the limit on all state and local income, property and sales taxes is $10,000.

Estate Taxes

Table data for Estate Taxes
 
Year Estate Size Where Taxation Starts Top Estate Tax Rate Alert Me
2019 $11,400,000 40%
2020 Indexed for inflation 40%

Regular IRA and Roth IRA Contribution Limits

Table data for RC Regular IRA and Roth IRA Contribution Limits for 2019
 
For tax year IRA Contribution Limit Additional contribution limits for those age 50 and over Alert Me
2019 $6,000 $1,000 $1,000

401(k) Retirement Plan Contribution Limits

Table data for 401(k) Retirement Plan Contribution Limits For 2019
 
401(k) Deferral Limit Additional Contribution Limits for Those Age 50 and Over Alert Me
$19,000 $6,000

Education (or Coverdell) IRAs

For 2019, the annual contribution limit is $2000 with eligibility phase out beginning at $190,000 (for married filing jointly) and $95,000 (for individual filers) of Adjusted Gross Income (some modifications apply).

Annual Gift Tax Exclusion

For 2019, gifts of $15,000 and under are not subject to gift tax.

2019 Payroll Taxes - Social Security and Medicare

2019 Employee wages subject to Social Security tax of 6.2% up to $132,900.

2019 Employee wages subject to Medicare tax of 1.45% on all wages and an additional 0.9% on wages above $200,000 for taxpayers filing single returns. For taxpayers filing joint returns, the additional 0.9% applies to wages above $250,000.

2019 Self employment income subject to Social Security tax of 12.4% up to $132,900.

2019 Self employment income subject to Medicare tax of 2.9% on all self-employment income and an additional 0.9% on wages above $200,000 for taxpayers filing single returns. For taxpayers filing joint returns, the additional 0.9% applies to wages above $250,000.

2019 Social Security Benefits

2019 Average monthly benefit for all retired workers - $1,461.

2019 Average monthly benefit for retired couples - $2,448.

2019 Maximum monthly benefit for a worker at full retirement age - $2,861.