Toward the end of most years there’s a lot of talk about the new tax laws and what changes we can expect. For the most part, these changes are usually relatively minor. A tax credit might end or an income bracket might have been tweaked here and there, but frequently that’s about the extent of it. Not so for 2019. The Tax Cut and Jobs Act didn’t just make a few cosmetic changes; it represents the most extensive tax overhaul in over a generation.
So what’s new for 2019? A better question might be what isn’t new for 2019. Here’s a good summary of what we can expect.
The change most of us will notice is the doubling of the standard deduction and the elimination of personal exemptions. Because of this change, fewer people than ever will be itemizing.
Many common deductions have been eliminated including those for employee business expenses and student loan interest deductions. Moving expenses may now only be deducted by active duty military personnel moving as part of a change in duty station.
Starting in 2019, the penalty for not having health insurance will be reduced to zero.
The loss of personal exemptions may be particularly difficult for large families. To compensate, the child tax credit doubles to $2,000 per qualifying child. In addition, up to $1,400 of the child tax credit can now be received as refundable credit.
These changes are just a few of the many differences the new law will bring to American taxpayers. As always, if you have any questions before you file your return, please consult a qualified tax professional.