Inflation adjustments and tax tables issued for 2019

By Alistair M. Nevius, J.D.

The IRS on Thursday issued the 2019 annual inflation adjustments for many tax provisions as well as the 2019 tax rate tables for individuals and estates and trusts (Rev. Proc. 2018-57). These adjusted amounts will be used to prepare tax year 2019 returns in 2020.

Many amounts are increasing for inflation in 2019. The standard deduction will increase to $24,400 for married individuals filing joint returns or surviving spouses, $18,350 for heads of household, and $12,200 for unmarried individuals (other than surviving spouses) and married individuals filing separate returns.

The maximum amount of the earned income tax credit (for taxpayers with three or more children) is increasing to $6,557 (from $6,431 in 2018).

The maximum amount of the adoption credit will go up to $14,080 in 2019. That is also the maximum amount that will be excludable from an employee’s gross income for qualified amounts paid or expenses incurred by an employer under an adoption-assistance program.

The 2019 exemption amounts for the alternative minimum tax will be $111,700 for married individuals filing joint returns and surviving spouses, $71,700 for unmarried individuals (other than surviving spouses), $55,850 for married individuals filing separate returns, and $25,000 for estates and trusts.

The Sec. 179 amount for tax years beginning in 2019 will be $1,020,000 with a phaseout threshold of $2,550,000.

The qualified business income threshold under Sec. 199A(e)(2) is increasing to $321,400 for married individuals filing joint returns, $160,725 for married individuals filing separate returns, and $160,700 for single individuals and heads of household (from $315,000 for joint returns and $157,500 for other taxpayers in 2018).

The Sec. 911 foreign earned income exclusion amount is increasing to $105,900 in 2019.

The basic exclusion amount for determining the unified credit against the estate tax will be $11,400,000 for decedents dying in calendar year 2019, up from $11,180,00 in 2018. The annual gift tax exclusion amount remains at $15,000, but the gift tax annual exclusion for gifts of a present interest to a spouse who is not a U.S. citizen will increase to $155,000 (from $152,000 in 2018).

Various penalty amounts for failure to file tax and information returns or furnish payee statements are also adjusted for inflation for 2019.

Alistair M. Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is The Tax Adviser’s editor-in-chief.

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