Taxes for Individuals
Taxes 2020: Here are the tax changes to expect this year
Last year ushered in sweeping changes to the U.S. tax landscape with more than 600 new rules enacted by the Tax Cuts and Jobs Act of 2017.
Still gone this year are exemptions along with deductions for moving costs, job search expenses, and tax prep fees. And how much you can write off for state and local taxes is still limited to $10,000 for the 2019 tax year.
“This is year two of tax reform, so now people are getting heads wrapped around what has changed,” Kathy Pickering, chief tax officer at H&R Block, told Yahoo Money.
All that said, there are some changes you should know about when you file your 2019 tax returns. Here’s what they are.
Tax Cuts & Jobs Act
There still are a pair of changes for the 2019 tax year from the new tax law.
The first has to do with divorce. If you receive spousal support, you no longer need to claim that as income. But if the alimony is coming out of your pocket, you can’t deduct that amount on your taxes like you previously could.
The new tax law also eliminated the health coverage penalty starting in 2019. So, if you didn’t have health insurance last year, you no longer have to pay that tax penalty.
While the standard deduction doubled last year under the new tax law, it increased again for the 2019 tax year to account for inflation. It’s now $12,200 for single taxpayers; $24,400 for married couples filing jointly; and $18,350 for heads of household.
Tax Extenders
Some old tax benefits are back. In December, Congress extended four temporary tax provisions:
Forgiveness of mortgage debt: Debt forgiven by your lender is usually considered taxable income. But this extender gets rid of any taxes a homeowner might be on the hook for when a portion of their outstanding mortgage balance is cancelled, such as a short sale or foreclosure.
Private mortgage insurance deduction: Homeowners can now deduct premiums for private mortgage insurance and insurance on mortgages backed by the Federal Housing Administration or Veterans Affairs.
From a February 19, 2020, post on Yahoo! Money. Read the complete article or contact a Dugan & Lopatka professional at (630) 665-4440 or info@duganlopatka.com.