2019 Tax Document Checklist

WHAT DOCUMENTS DO I NEED?


Here’s a list of common documents needed to prepare your tax return. Not all of these document

types will apply to your situation. If in doubt, toss it in, and we will review it.

2019 Tax Document Checklist (pdf)

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Tax Updates

2019 Tax Change Highlights

  • Standard deduction: $12,200 (Single); $24,200 (Married Filing Jointly); plus $1,650 if Single over 65 or $1,300 if Married over 65 (per person).
  • IRA contribution: $6,000 if under 50; $7,000 if 50 or older.
  • Social Security wage base: Maximum earnings subject to Social Security tax $132,900 for 2019.
  • Health insurance: The penalty for not having health insurance coverage is $0 for 2019.  However, the premium tax credit is still available for eligible taxpayers.
  • Solar Credit: 30% solar credit for projects complete installed by 12/31/19.
  • Salt and local tax deduction: The aggregate deduction for state and local income taxes (or sales taxes), property taxes, and personal property taxes remains capped at $10,000.
  • Business mileage rate: $0.58  per business mile driven; drops to $0.575 in 2020.
  • Mortgage Insurance Premium Deduction: The tax deduction for the cost of premiums for mortgage insurance (PMI) for homes and vacation homes can be claimed along with qualified mortgage interest, if you itemize deductions. The provision was renewed retroactively for 2018 and extended through 2020. If you had a high amount of PMI in 2018 and itemized deductions, you may want to consider amending your 2018 return to capture this additional deduction.
  • Medical Expense Deduction: The floor for this deduction will remain at 7.5% of adjusted gross income (AGI) for 2019; same as 2018. It will jump to 10% of AGI for tax year 2020. If you itemize deductions and have qualified out-of-pocket medical expenses, then you may be able to deduct the expenses over 7.5% of your AGI.
  • Tuition Deduction: The “above-the-line” deduction for qualified tuition and related expenses. If you had a high amount of qualified tuition expenses in 2018, you may want to consider amending your 2018 return to capture this additional deduction. “Above-the-line” means that you do not have to itemize deductions to take advantage of this special deduction. The maximum deduction is $4,000 (however, certain income phaseouts apply).
  • No Age Limit on Traditional IRA Contributions: Prior law stopped you from contributing funds to a traditional IRA if you were age 70½ or older. Now you can make a traditional IRA contribution at any age (if you are working and have earned income), just as you could and still can with a 401(k) Roth IRA. This change applies to contributions made for tax years beginning after December 31, 2019.
  • No 10% Penalty for Birth/Adoption IRA Withdrawals: There is no 10% early withdrawal penalty on IRA or qualified retirement plan distributions if the distribution is a “qualified birth or adoption distribution.” The maximum penalty-free distribution is $5,000 per individual per birth or adoption. This change applies to distributions made after December 31, 2019. Tax tip: A birth or adoption in 2019 can signal the start of the one year, allowing qualified birth and adoption distributions as soon as January 1, 2020.
  • RMDs Start at Age 72:  Before the SECURE Act, you generally had to start taking required minimum distributions (RMDs) from your traditional IRA or qualified retirement plan in the tax year you turned age 70½. Now you can wait until the tax year you turn age 72. This change applies to RMDs after December 31, 2019, if you turn age 70½ after December 31, 2019. IRA owners who attained age 70 1/2 in 2019 are still required to begin taking RMDs by April 1, 2020.
  • RMDs on Inherited Accounts: For anyone who inherited an IRA from an original IRA owner who passed away prior to January 1, 2020, no changes to the current distribution schedule are required. However, for situations where the original IRA account owner passes away after December 31, 2019, fewer beneficiaries will be able to extend distributions from the inherited IRA over their lifetime. Many will instead need to withdraw all assets from the inherited IRA within 10 years following the death of the original account holder. Exceptions to the 10-year distribution requirement include assets left to a surviving spouse, a minor child, a disabled or chronically ill individual, and beneficiaries who are less than 10 years younger than the decedent.
  • IRS Scams: Scammers continue to be a problem and have grown in their cleverness. Please note that the IRS will not call you. If you receive any tax notices in the mail, please contact me immediately.

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2020 Tax Change Highlights

  • Standard deduction: $12,400 (Single); $24,800 (Married Filing Jointly); plus $1,650 if Single over 65 or $1,300 if Married over 65 (per person).
  • Business  mileage rate: Drops to $0.575 in 2020.
  • IRA contribution: $6,000 if under 50; $7,000 if 50 or older.
  • Social Security wage base: Maximum earnings subject to Social Security tax $137,700 for 2020.
  • Health insurance: The penalty for not having health insurance coverage is $0 for 2020. However, the premium tax credit is still available for eligible taxpayers.
  • Solar Credit: 26% solar credit for projects complete installed by 12/31/20.
  • Medical Expense Deduction: The floor for this deduction will increase to 10% of adjusted gross income (AGI) for 2020.

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