With all of the recent changes to the tax code as part of the 2019 tax reform plan, it’s no surprise that many folks have a lot of questions. Northern Business Solutions strives to not only stay ahead of changes in tax law, but also educate you, the client, on what those changes are and how you personally will be affected.
The biggest changes are briefly outlined below, however if want the peace of mind that only comes from having a professional prepare your return, please call us today!
- Standard Deduction Increase
- Single and Married Filing Separately (MFS): $12,000
- Married Filing Jointly (MFJ): $24,000
- Head of Household: $18,000
- Personal Exemption Eliminated
- Other Significant Changes
- Child tax credit increased to $,2000 per qualifying child
- State and Local taxes capped at $10,000 deduction; Previously, there was no cap
- Unreimbursed job expenses can no longer be written off
- Alimony payments are no longer deductible to the person making the payments, and subsequently, are no longer taxable to the recipient for divorce of separation agreements signed or modified after 1/1/2019.
- Top corporate tax rate has been lowered from 35% to 21%
| Tax Rate | Individual | Married Filing Separate | Head of Household | Married Filing Joint |
|---|---|---|---|---|
| 10% | $0 – $9,525 | $0 – $9,525 | $0 – $13,600 | $0 – $19,050 |
| 12% | $9,526 – $38,700 | $9,526 – $38,700 | $13,601 – $51,800 | $19,051 – $77,400 |
| 22% | $38,701 – $82,500 | $38,701 – $82,500 | $51,801 – $82,500 | $77,401 – $165,000 |
| 24% | $82,501 – $157,500 | $82,501 – $157,500 | $82,501 – $157,500 | $165,001 – $315,000 |
| 32% | $157,501 – $200,000 | $157,501 – $200,000 | $157,501 – $200,000 | $315,001 – $400,000 |
| 35% | $200,001 – $500,000 | $200,001 – $300,000 | $200,001 – $500,000 | $400,001 – $600,000 |
| 37% | over $500,000 | over $300,000 | over $500,000 | over $600,000 |
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