IRS 2019 Tax Tables, Deductions, & Exemptions

The IRS Announces New Tax Numbers for 2019

Each year, the IRS updates the existing tax code numbers for items which are indexed for inflation. This includes the tax rate tables, many deduction limits, and exemption amounts. The following are the tax number which will be in effect beginning January 1, 2019.

Looking for the 2018 Tax Tables?

If you are looking for the tax tables for filing your 2018 taxes by April of 2019, click the button below. This article references the 2019 tax tables for the tax forms to be filed in April 2020.

2019 Income Tax Brackets

2018 Income Tax Tables - Click on image to enlarge.

The most important update for many Americans is the tax brackets; the changes to the income ranges for the marginal tax rates. Each bracket saw an increase in the range tied to inflation.

The image shows the 2019 tax brackets which you will use to calculate your taxes to be filed in 2019. (Numbers are rounded to the nearest dollar where needed.) Every tax bracket got a little bump up in size, allowing more of your money to be taxed at lower rates.

Understanding the tax brackets will help you to estimate your potential tax liability next year. Armed with your estimated taxes, you then have until December 2019 to make charitable contributions, invest for retirement, or do other things which can help manage and lower your tax liability.

Also included in the table is the actual income taxes you will owe based on your income level. The table provides the two most common filing statuses: Married Filing Jointly, and Single Individuals.

For those who file either Married Filing Separate or Head of Household, an abbreviated table is below showing the income ranges for each tax bracket.

Married Filing Separate Tax Table

  • 10% - $0 to $9,700

  • 12% - $9,701 to $39,475

  • 22% - $39,476 to $84,200

  • 24% - $84,201 to $160,725

  • 32% - $160,726 to $204,100

  • 35% - $204,100 to $306,175

  • 37% - Over $306,175

Head of Household Tax Table

  • 10% - $0 to $13,850

  • 12% - $13,851 to $52,850

  • 22% - $52,851 to $84,200

  • 24% - $84,201 to $160,700

  • 32% - $160,701 to $204,100

  • 35% - $204,101 to $510,300

  • 37% - Over $510,300

Deductions & Exemptions

In addition to the tax rates, the IRS upped many of the deductions and exemptions Americans use to lower their taxable income calculation, and therefore their taxes. Below are some of the most common deductions and exemptions Americans can take.

Standard Deduction for 2019

  • $24,400 – Married filing jointly and surviving spouses

  • $18,350 – Head of Household

  • $12,200 – Unmarried individuals

  • $12,200 – Married filing separately

The Standard Deduction is an amount every taxpayer is allowed take as a deduction from their income to reduce their taxable income. The Standard Deduction is used by individuals and families who do not itemize or who have itemized deductions less than or near the Standard Deduction. Under the new tax law, many itemized deductions were eliminated or greatly limited while the Standard Deduction was increased. As a result, the vast majority of people will be filing using the Standard Deduction, even if those who itemized in the past.

Personal Exemption

  • $0 – Personal Exemption, one for each qualifying household member

The current tax code sets a $0 Personal Exemption amount for the purposes of calculating taxable income, effectively removing the Personal Exemption for tax filers. The Personal Exemption is still used in other areas of the tax code, i.e. for setting the gross income limitation for a qualifying relative.

Estate Tax Exemption

  • $11,400,000 – The amount a person can pass on to their heirs which is exempt from estate taxes.

The estate tax is effectively a tax on dying, where the Federal Government takes up to 37% of the value of the estate (everything owned by the deceased). Fortunately, the estate tax credit creates an amount you can pass on to your heirs without being taxed.

Annual Exclusion for Gifts

  • $15,000 per person, per person

You can also avoid the estate tax by gifting small amounts each year to your heirs. The Gift Tax Annual Exclusion remained the same between 2018 and 2019. Gifts of less than the annual gift exclusion are passed on tax-free, while gifts over the exemption amount could be subject to the unified gift and estate tax.

What per person, per person means: The gift exclusion applies to each person an individual gives a gift to. So a married coupe with a son and daughter could gift a total of $60,000 per year to their children. $15,000 from father to son; $15,000 from father to daughter; $15,000 from mother to son; and $15,000 from mother to daughter. If the children were married, an additional $60,000 could be gifted to their spouses.

Alternative Minimum Tax (AMT)

Until recently, the Alternative Minimum Tax had unfortunately become the bane of the middle class. Up until recently, this exemption amount was not indexed for inflation, meaning middle-class households have ended up being a majority of the AMT taxpayers. The exemptions were indexed for inflation by the Obama Administration and increased by the Trump Administration, which greatly reduced the impact of the AMT on the middle class.

The AMT offers fewer deductions, increasing the taxes owed by individuals. The AMT offers a much higher exemption than the traditional tax code, which is designed to avoid middle-class taxpayers from being hit by the AMT.

Exemption Amounts

  • $111,700 – Married or Surviving Spouses

  • $71,700 – Unmarried Individuals

  • $55,850 – Married Filing Separately

  • $25,000 – Estates and Trusts

Exemption Phaseouts Begin

Another change to the AMT designed to help avoid it hitting the middle class is the change to the exemption phaseout. The phase-outs are now significantly higher, reducing the chances middle-class individuals will be hit by the AMT. If your income is over the above amounts, you'll begin losing your exemption which will increase your AMT tax faster. 

  • $1,020,600 – Married or Surviving Spouses

  • $510,300 – Unmarried Individuals

  • $510,300 – Married Filing Separately

  • $83,500 - Estates and Trusts

28% AMT Tax Bracket

Normally, AMT is taxed at a flat rate of 26%. For “high-income” taxpayers, however,, a 28% tax is applied to income in excess of the following amounts. Again, the 28% tax rate hits the middle-class. 

  • Income over $194,800 – Joint Returns, individual returns, estates and trusts.

  • Income over $97,400 – Married filing separately

Source: IRS.gov

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Joshua Escalante Troesh is a tenured professor of Business at El Camino College and the founder of Purposeful Finance. He is also the owner of Purposeful Strategic Partners, a fiduciary and fee-only financial planning firm and a Registered Investment Advisor. He can be reached for comment at info@purposefulfinance.org