Mortgage insurance deduction:
For those who are required to pay personal mortgage insurance (PMI) on their home or vacation homes, those payments are once again deductible through 2020 — and retroactive to 2018.
College tuition deduction:
Those with qualifying college expenses can deduct up to $4,000 a year (depending on income) whether they itemize or not. This higher education write-off expired at the end of 2017. Congress made the deduction retroactive to 2018 and extended it through 2020.
The threshold for claiming medical expenses as a deduction was set to increase to 10 percent of adjusted gross income (AGI) for 2019, but it remains at 7.5 percent through 2020.
The standard deduction has increased slightly for all filing statuses. For 2019, the standard deduction amount will be $12,200 for Single and Married Filing Separately, $18,350 for Head of Household and $24,400 for Married Filing Joint and qualifying Widow(er). The additional standard deduction amount for taxpayers who are age 65 or older and/or blind is $1,650 for Single and Head of Household and $1,300 for Married Filing Joint, Married Filing Separate and Qualifying Widow(er).
The standard deduction for a dependent being claimed on another taxpayer’s return but also filing their own tax return is $1,100 or $350 plus the dependent’s earned income, not to exceed the standard deduction amount for their filing status.
Alimony deduction eliminated:
For divorce decrees signed or modified after 12/31/2018 that require alimony payments, the payer cannot take a deduction for payments made. In addition, the recipient is not required to claim payments received as income on their return.
Form 1040‐SR U.S. Tax Return for Seniors:
New for 2019, taxpayers aged 65 and over will have the option to file on the new Form 1040‐SR. The new form follows the standard Form 1040 format but has a larger font size making it easier to read.
Health Care: Individual Responsibility Payment:
The penalty for not having health insurance no longer applies for 2019 federal tax returns. The queson regarding health insurance coverage has been eliminated from the 2019 tax program and Form 8965 will no longer be necessary. However, the District of Columbia, Massachusetts and New Jersey have state health insurance mandates and penalties in effect for 2019. There has been no change to Form 8962 – Premium Tax Credit and the question regarding purchasing marketplace insurance remains in the 2019 tax program.
Increased 401(k) Contribution Limits:
For 2019, 401(k) contribution limits increased to $19,000 with a $6,000 catch‐up amount for taxpayers over age 50.
Increased IRA Contribution Limits:
For 2019, IRA contributions limits increased to $6,000 with a $1,000 catch‐up amount for taxpayers over age 50.
Increased HSA Contribution Limits:
For 2019, HSA contribuon limits have increased to $3,500 for taxpayers with self‐coverage and $7,000 for taxpayers with family coverage.