The Internal Revenue Service recently issued the finalized tax brackets for the 2019 tax season, after adjusting rates to account for inflation.
The Trump administration passed the Tax Cuts and Jobs Act at the end of 2017, which enacted a number of reforms to the U.S. tax code—including lowering income brackets for most individuals.
The IRS adjusts tax rates for inflation each year – and these changes will generally apply to tax returns filed in 2020 (the 2019 tax season). As previously reported by FOX Business, the agency’s new method for gauging inflation—a condition of the tax reform law -- will actually raise tax payments, and government revenue, when compared with the measure previously used because things like the standard deduction will increase more slowly.
Here’s what rates look like for 2019:
10%: Individuals with incomes of $9,700 or less/Married couples with $19,400 or less
12%: Individuals with incomes over $9,700/Married couples with more than $19,400
22%: Individuals with incomes over $39,475/Married couples with more than $78,950
24%: Individuals with incomes over $84,200/Married couples with more than $168,400
32%: Individuals with incomes over $160,725/Married couples with more than $321,450
35%: Individuals with incomes over $204,100/Married couples with more than $408,200
37%: Individuals with incomes over $510,300/Married couples with more than $612,350
The standard deduction for married couples rises to $24,400, for individuals it increases to $12,200, up $400 and $200, respectively.
Alternative Minimum Tax:
For individuals, the exemption amount for tax year 2019 is $71,700 and it phases out at $510,300.
For married couples the exemption is $111,700 and phases out at $1,020,600.
Earned income credit:
For taxpayers filing jointly with at least three children in the 2019 tax season the earned income tax credit rises to $6,557.