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With the new year finally upon us, many Americans are setting their sights on tax season. Indeed, while the holiday season tends to drain and put a strain on the finances of many families, tax season often helps to replenish the bank accounts of many working and middle-class Americans. Furthermore, many others receive tax breaks and other financial incentives that make filing taxes beneficial. Whether you are considering filing your taxes online or through a tax preparer, the following is a closer look at some of the changes you should know for the 2019 tax season.
Pretty much everyone who is working full-time is required to file taxes annually. Those under 65 who made more than $10,400 are expected to file while those over 65 must file if they have made over $11,950. On another note, those under 65 who file head of household and have made $13,400 must file; those over 65 filing as head of household must file if they have made $14,950. Furthermore, those who received health care via the Affordable Care Act may also be required to file. Additionally, those who are self-employed must file once they have made at least $400. Searching for the best online tax service will help you find the right tax service for your situation.
One of the most talked about changes is that of the tax brackets. While there are still seven brackets, the amounts have been adjusted for inflation and are as follows:
On another note, the standard deductions have also changed. They are now $12,200 for single-filers (which is a $200 increase from 2018), $24,400 for married joint filers (which is up $400 from 2018), and $18,350 for head of household (which is up $350 from 2018). Furthermore, the IRS have also raised the employee contributions limit for 401(k), 403(b) as well as most 457 plans to $19,000, making it possible for those over the age of 50 to save an additional $6,000. Most excitingly for tax payers, the IRS will do away with the insurance mandate fee, which was $695 per adult and $347 for every child under age 18.
Overall, there have been many minor changes made to the existing tax laws. If you are confused, be sure to contact a professional before filing (or opting out) this year.