“I shall never use profanity except in discussing house rent and taxes.” -Mark Twain
With 2019 coming to a close, people start thinking about Thanksgiving meals with relatives they wish they could see more (or less) of, and the excitement of watching loved ones open their presents around the Christmas tree. There’s also a dark time to the end of the year, because it means tax season will soon be upon us, oh joy.
With the ever-changing tax code, it’s challenging to stay on top of what applies from last year and what’s completely different. Let’s take a look at what has changed in 2019.
No More Personal Exemption
In an attempt to simplify the confusing tax code, lawmakers have done away with the personal exemption this year. In order to make up for this, which was around $4,000, lawmakers raised both the standard deduction and the Child Tax Credit.
The standard deduction amounts increased this year. They are now $24,400 for married couples, $18,350 for heads of household and $12,200 for individuals. Since the majority of people choose to use the standard deduction instead of itemized deductions, this increase will have a positive effect on millions of taxpayer’s wallets.
Child Tax Credit
While taxes are hardly worth getting excited about, the new Child Tax Credit is something that will help many families.
The credit has increased from $1,000 to $2,000 for any child under the age of 17. Another change in the code is that more money will go into the pockets of families. Income limitations have decreased as well. If the parent or guardian of a child owes no income tax or doesn’t have an income, they’ll now be eligible for a larger refund.
Charitable contribution limits have risen from 50% percent of a person’s adjusted gross income to 60%. The downside to the change in this rule is that you can no longer deduct any donations you made to your college in exchange for purchasing tickets to sporting events.
This rule is something that taxpayers have been waiting for since 2010. Starting this year, the Affordable Care Act’s (ACA) tax penalty is gone. This will save individuals who chose not to purchase health insurance $695 per adult and $348 per child.
Even with all the positive changes to this year’s tax code, it’s important to make sure that you have a solid understanding before deciding to do your own taxes. If you don’t want to pay someone to figure out what you owe or are owed then most local libraries and colleges offer free assistance.
Copyright 2020, ConservativeStar.com