Each year we release our Key Financial Data, full of information you need at your fingertips to make well-informed decisions about your money this year.
Click this link [KFD 2019] to download your 2019 Key Financial Data Report.
The highlights for 2019 build on the changes to the tax law in 2017:
The standard deduction increased so significantly in 2017 that many taxpayers won’t benefit from itemizing their deductions. This year the standard deduction for a single taxpayer is $12,200, and for married households it’s $24,400. If the total value of your deductions (think charitable donations, mortgage tax, medical expenses, etc.) is less than the standard deduction, then you can just assign the standard deduction and save some time documenting your expenses.
As a result of the change in the standard deduction, tax bunching is now a strategy. See my December blog for how this works. It is especially useful for those who make large charitable gifts, or who use donor-advised funds.
The expectation is that the number of individuals making charitable contributions (that they previously itemized) will decrease, but the size of the donation for those who itemize may go up. If you are unclear about whether you are getting any tax benefits from the financial support you give to your favorite nonprofits, check with your CPA.
High net worth families can take advantage of the increase in the lifetime gifting limit, which more than doubled from 2017 to 2018, and now stands at $11,400,000. This is a significant opportunity to build multigenerational wealth.
Some taxpayers will get a tax surprise this year as the SALT (state and local taxes) was capped at $10,000. Taxpayers normally get a tax deduction for SALT, which affects taxpayers differently depending on how property, income, and sales taxes are designed where you live. If you live in a house with a $25,000 tax bill, you may have lost $15,000 in tax deductions that you previously itemized.
Other important details you can find in the Key Financial Data:
- Tax deadlines for those who pay quarterly taxes, such as those who are self-employed or retired.
- Higher contribution limits for IRAs and 401(k) plans for those who are still working and contributing to future retirement needs (I’m talking to you, GenX families).
- Gift tax exclusion of $15,000 remains the same. This is the amount you can gift to any individual without paying taxes, and is also the 529 gifting limit.
- Tax rates on investment taxes, including capital gain and qualified dividend rates.
- Medicare and Long-Term Care deductions and premiums, as well as current numbers for Social Security.
Our goal is to help people to use their money to have the lives they want. We know that when you understand how to make a financial decision, you can be more confident about those decisions. If you’d like to learn more about how we design financial plans for our clients, please visit us at debrabrennantagg.com or call us at (972) 980-7526.