Personal Tax Plan

Personal Tax Plan

The Tax Cuts and Jobs Act-Enacted in December of 2017 make massive changes to prior tax law. Clearly understanding the key provisions helps higher income individuals or business owners to leverage their benefits and comply with the new tax laws.

The board's aim is to protect investors and other stakeholders of public companies by ensuring that the auditor of a company's financial statements has followed a set of strict guidelines.

Tax Rate for 2019

The federal ordinary income tax rates range from 10% to 37%.

The Long-term capital gains are subject to tax either 0%, 15% or 20% depending on a taxpayer’s filing status and taxable income.

Single

If taxable income is over but not over the tax is
$0 $9,700 10% of the amount over $0
$9,700 $39,475 $970 plus 12% of the amount over $9,700
$39,475 $84,200 $4,543 plus 22% of the amount over $39,475
$84,200 $160,725 $14,382 plus 24% of the amount over $84,200
$160,725 $204,100 $32,748 plus 32% of the amount over $160,725
$204,100 $510,300 $46,628 plus 35% of the amount over $204,100
$510,300 no limit $153,798 plus 37% of the amount over $510,300

Married Filing Jointly or Qualifying Widow (Widower)

If taxable income is over but not over the tax is
$0 $19,400 10% of the amount over $0
$19,400 $78,950 $1,940 plus 12% of the amount over $19,400
$78,950 $168,400 $9,086 plus 22% of the amount over $78,950
$168,400 $321,450 $28,765 plus 24% of the amount over $168,400
$321,450 $408,200 $65,497 plus 32% of the amount over $321,450
$408,200 $612,350 $93,257 plus 35% of the amount over $408,200
$612,350 no limit $164,709 plus 37 % of the amount over $612,350

Income Tax Deductions

Personal Exemption

The 2017 tax law suspends the deduction for personal exemptions for 2018 through 2025 tax year.

The standard deduction

Filing status 2019 tax year
Single $12,200
Married, filing jointly $24,400
Married, filing separately $12,200
Head of household $18,350

People over age 65 or who are blind get an additional standard deduction, $1,300 for married or surviving spouse, $1,650 for single or head of household.

Itemized Deductions

The 2017 tax law makes significant changes to the scope of itemized deductions available to individual taxpayers. Many taxpayers who previously itemized their deductions may find it more beneficial to claim the standard deduction.

State and Local Income Tax Deductions- Itemized deductions for state and local income taxes, property taxes and sale taxs are limited to $10,000.00 in the aggregate.

Interest Deductions- Interest Deduction fall into one of five categories, investment interest, home mortgage interest, trade or business interest, passive activity interest, or personal interest. Depending on how you characterize interest, the interest deduction rule is different

  • Investment Interest - You can’t deduct more than your net investment income. If it is not fully deductible in the current year may be carried over to the following year.
  • Home Mortgage Interest- Qualified residence interest was deductible on up to $750,000. The proceeds of the home equity loan must be used to buy, build and substantially improve the home that is securing the loan. If it used for personal expenses, the interest is not deductible.
  • Trade or Business Interest - You may be able to deduct interest expense related to amounts you borrow personally and contribute to a trade or business.
  • Passive Activity Interest - Deductions for passive losses are limited to passive income.
  • Personal Interest- You can’t deduct your personal interest expense.

Medical Expense Deductions- You may deduct unreimbursed medical expenses that exceed 10% your AGI in 2019.

Miscellaneous itemized Deductions-The 2017 tax law suspends the deduction for miscellaneous itemized deductions which include unreimbursed employee travel and transportation, meal, or other job related uniforms, tools, dues, subscription, and job related education expense.