What’s New for 2019 Tax Returns?

From now until tax day on April 15, 2020, we will be working hard to complete 2019 tax filings. (For more information about how this might look for you, refer to our Guide to the Tax Changes of 2018.)

Although there are few changes to how we’ll be filing 2019 tax returns from 2018, here are some items to note.

Health insurance. The penalty in the form of a steep tax fine for failing to have health insurance has been eliminated. Therefore, on your 2019 tax returns, there will be no box on Form 1040 to check off indicating that you had health insurance. Be aware, though, that some states do have their own individual health insurance requirements, or you’ll need to have an exemption. For example, Massachusetts, New Jersey and Washington, D.C. have such mandates, and Vermont will have a mandate starting in 2020.

Alimony. As of January 1, 2019, alimony is no longer deductible to the payer and is no longer taxable to the payee for separation or divorce agreements or decrees in effect on this date or later.

Medical expense deduction. If you had a medical expense deduction in 2017 or 2018, the threshold was rolled back to 7.5% of AGI (adjusted gross income). In 2019 it was supposed to increase to 10%. However, with the Further Consolidated Appropriations Act of 2020, the 7.5% threshold has been extended through 2020 (and includes 2019 tax filings).

Deduction for qualified tuition and related expenses. This above-the-line deduction was extended through 2020.

Tax Forms – Refreshed, New and Updated

• Form 1040: The Form 1040 for 2019 tax returns has been revised and redesigned from the 2018 version.
• Form 1040SR: The IRS has a new Form 1040SR intended for taxpayers over age 65. Thanks to the Bipartisan Budget Act of 2018, the new form is similar to the standard Form 1040, but with larger fonts. It also includes a chart of the standard deduction and additional standard deduction amounts for taxpayers over 65 years old or who are blind. Note: Taxpayers with more complicated tax situations should use the regular Form 1040.
• Other New Tax Forms for 2019
  • Forms 8995 and 8995-A: Qualified Business Income Deduction Simplified Computation
  • Form 8985: Pass-Through Statement— Transmittal/Partnership Adjustment Tracking Report
  • Forms 965-C, 965-D and 965-E: Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System
  • Form 8978: Partner’s Additional Reporting Year Tax
  • Form 8997: Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

If you have any questions about your taxes, feel free to contact us.