January 19, 2019 - Douglas Myser

How the 2019 tax rates could affect you. It is yet an undecided issue. Not until you file your tax return will you know for sure. The promise of the Trump Administration throughout the campaign and after the election was that tax cuts would be forthcoming, and that would spur the economy on. No doubt the economy has been on a roll, but we have found that some people who have filed taxes have actually had a tax increase. And it is an odd proposition, as it seems to be a combination of different factors that can lead one person to an increase, and another to a tax refund. The only way to know is to file away. How the 2019 tax rates could affect you..

The Internal Revenue Service just changed its tax rates for 2019, but taxpayers need not panic. The IRS's newly released rates and figures are simply adjusted for inflation, as it does every year. The changes are a mere blip compared to the ones that taxpayers experienced in December 2017, when the Tax Cuts and Jobs Act, the largest revision to tax law in decades, became law. The inflation adjusted rates also don't take effect until Jan. 1, which means taxpayers will not use these figures for their 2018 tax returns filed in 2019. The changes will generally affect returns filed in 2020, the IRS said.

Here are the new rates. The standard deduction for single taxpayers and married individuals filing separately is increasing $200 to $12,200 and for married individuals filing jointly, the increase is $400, up to $24,400. The standard deduction for heads of households will be $18,350, a $350 increase. The tax brackets have also been adjusted slightly for inflation. 27% for individual single taxpayers with incomes over $510,300, 35% for income over $204,100, 32% for incomes over $160,725, 24% for incomes over $84,200, and 22% for incomes over $39,475. If you are one of the unlucky few who do owe more in tax, quite a shock given the campaign promise of lower rates, you may want to discuss your Tax Relief options with a Tax Resolution Company, like the IRS Fresh Start Program, which gives some options for Tax Debt reduction.