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Tax Law Changes

The tax reform law of 2017 made changes that affect every taxpayer. Most of those changes went into effect last year. A few are new for 2020, when you are required to file your 2019 federal income taxes.

Tax Changes for 2019

The Tax Cuts and Jobs Act of 2017 made big changes to how the government calculates your income taxes. Most of the changes took effect last year and applied to your 2018 federal tax return. But a few changes go into effect this year, and apply for the first time to your 2019 return. The Internal Revenue Service also made adjustments for inflation to some deductions, credits, and tax brackets.

New in 2019: Affordable Care Act Fee Dropped 

The health care law’s “individual mandate” is eliminated starting with tax year 2019.

New, Higher Standard Deduction Adjusts for Inflation 

The law nearly doubled the standard deduction for most filers last year. The standard deduction for tax year 2019 is

  • $12,200 for individuals (up $200 from last year to adjust for inflation)

  • $18,350 for heads of household (up $350)

  • $24,400 for married couples filing jointly (up $400)

Standard Deduction Versus Itemizing

Deductions lower the amount of income that you pay tax on. You can take the standard deduction or you can itemize deductions. Your standard deduction may now be greater than your total itemized deductions. Learn how to decide to take the standard deduction or to itemize.

Itemized Deduction Changes for 2019

Many itemized deductions were eliminated or capped in 2018. Here are a couple of new changes for 2019.

  • New Alimony and Divorce Payments

    • If you pay alimony under a divorce or separation agreement created or changed in 2019 or later, you cannot deduct it.

    • If you receive alimony under an agreement made or modified in 2019 or later, it won’t be included in your taxable income. 
  • Medical and Dental Expenses

    • For tax year 2019, you can only deduct unreimbursed medical and dental expenses that exceed 10% of your adjusted gross income.

    • For tax year 2017, the threshold was 10% of adjusted gross income. It dropped to 7.5% for tax year 2018 but returns to 10% for tax year 2019.

Tax Rates Stay the Same as in 2018

Tax rates fell last year under the new tax law. The rates remain the same this year, ranging from 10% to 37%. The tax brackets, or income ranges, increased slightly for inflation. Check out this table with the 2019 and 2018 tax rates and brackets.

Personal and Dependent Exemptions Remain at Zero

These were eliminated last year. Prior to that, they lowered your taxable income by $4,050 each for you, your spouse, and your dependents. The higher standard deduction and increases in other credits may help offset the loss of the exemptions.

Child Tax Credit Stays Put After Doubling in 2018

Tax credits are better than deductions because they reduce your tax bill dollar-for-dollar. The Child Tax Credit now reduces your taxes up to $2,000 per child under 17. (This change went into effect last year.) Many more families now qualify for the credit as income limits have gone up to

  • $200,000 for individual filers (the same as last year and up from $75,000 two years ago)

  • $400,000 for married filing jointly (the same as last year and up from $110,000 two years ago)

This is a “refundable” credit, meaning you can get up to $1,400 per child back even if your 2019 tax bill is $0. You must claim the credit on your tax return to get it.

Social Security Number Required for Child Tax Credit

Any child you claim for the Child Tax Credit must now have a Social Security number. They must have the number by the due date of your tax return (including extensions).

Credit for Other Dependents, Created Last Year, Stays at $500

You can now claim a credit for your other dependents, including kids 17 and up and other relatives. To qualify, a dependent must be a U.S. citizen, U.S. national, or U.S. Green Card holder.

Learn more about the tax law changes, including last year’s itemized tax deduction changes, with Tax Reform: Basics for Individuals and Families.

New 2019 Tax Rates and Brackets

The Tax Cuts and Jobs Act of 2017 kept the number of tax rates at seven but lowered most of them. The tax rates stay the same for 2019, though the tax brackets, or income ranges, have adjusted for inflation.

You can find your tax rate in the 2019 tax brackets table. To see if your rate has changed since last year, compare it to your rate in the 2018 table below.

2019 Tax Rates and Brackets

Rate Single Married, Filing Separately Married, Filing Jointly Head of Household
Taxable income over...
10% $0 $0 $0 $0
12% $9,700 $9,700 $19,400 $13,850
22% $39,475 $39,475 $78,950 $52,850
24% $84,200 $84,200 $168,400 $84,200
32% $160,725 $160,725 $321,450 $160,700
35% $204,100 $204,100 $408,200 $204,100
37% $510,300 $306,175 $612,350 $510,300

2018 Tax Rates and Brackets

Rate Single Married, Filing Separately Married, Filing Jointly Head of Household
Taxable income over...
10% $0 $0 $0 $0
12% $9,525 $9,525 $19,050 $13,600
22% $38,700 $38,700 $77,400 $51,800
24% $82,500 $82,500 $165,000 $82,500
32% $157,500 $157,500 $315,000 $157,500
35% $200,000 $200,000 $400,000 $200,000
37% $500,000 $300,000 $600,000 $500,000
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Last Updated: December 12, 2019

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