How to file taxes in 2019

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How to file taxes in 2019

Updated Dec. 31, 2018: In 2017, the Trump administration signed a massive tax reform bill — the Tax Cuts and Jobs Act — into law. In 2018, those changes went into effect. As such, filing taxes in 2019 is going to feel different for many Americans.

The process itself is pretty much the same. You send the Internal Revenue Service all the applicable paperwork and possibly a check. Alternately, you send the IRS the applicable paperwork and it issues you a refund. But the tax code has been dramatically altered: The tax brackets are different, the standard deduction has doubled in size and quite a few tax breaks have gone away.

We’ll walk you through the major changes so you know how to file taxes in 2019. Let’s dive in.

Getting ready to file taxes

To file, you need any applicable:

  • W-2s

  • 1099s, which report other income, like interest and dividends or self-employment wages

  • 1098s, which report stuff you can deduct, like mortgage interest or tuition expenses

  • Documentation for other deductions you want to take, like receipts for charitable donations

  • Your 2017 tax return

  • Bank account and routing number, if you want the IRS to direct-deposit your refund

  • Your adjusted gross income, which is basically your gross income (including any interest mentioned on your 1099s), minus “above the line” deductions, most notably, retirement plan contributions, alimony, medical expenses and unreimbursed business expenses. Sounds complicated, but your 1040 walks you through calculating AGI.

Next, bookmark these dates

  1. Expect W-2s by Jan. 31, 2018.

  2. Your 2018 taxes are due by April 15, 2019.

  3. If you need more time, you must file for an extension by April 15, 2019.

If you get an extension, your tax returns are due by Oct. 15, 2019. But don’t get it twisted: That extension only applies to your paperwork. If you owe the Internal Revenue Service money, you must pay by April 15, 2019.

Figure out your filing status

There are five options, pretty much determined by your marital status on the last day of the year.

  • Single Filing Status, meaning you’re not married, divorced or legally separated

  • Married Filing Jointly, meaning you're married and filing a return with your spouse

  • Married Filing Separately, meaning you’re married, but not filing a return with your spouse

  • Head of Household, meaning you’re not married, but have paid more than half the cost of maintaining a home for yourself and a qualifying dependent

  • Qualifying Widow/Widower, meaning your spouse died within the last two years, you haven’t remarried and you have a dependent child

Your filing status is mostly straightforward. If you’re single, file single. If you’re a head of household, file head of household. If you’re a recent-ish widow(er) with a dependent, file qualifying widow(er). If you’re married, you’ve got a choice to make. Most couples score a bigger tax break by filing jointly, but there are reasons to file separately. Here’s a high-level overview of filing together vs. filing solo.

Why married couples file jointly

  1. For a higher standard deduction (more on this in a few)
  2. To reduce what you owe, since higher tax brackets kick in sooner when you file separately
  3. To qualify for certain deductions you can get more easily when filing jointly, like the Child & Dependent Care tax credit

Why married couples file separately

  1. To separate your tax liabilities (say, you’re worried your spouse is evading Uncle Sam)
  2. To score a significant itemized deduction one spouse can’t take were the couple to combine incomes (some deductions are limited by your adjusted gross income)
  3. One spouse has debts subject to refund seizure or an income-based payment (like student loans

We can’t tell you what to do. You or your tax preparer need to look at your finances and crunch the numbers. Having said that, you may want to prepare your tax returns both ways to see if it’s better for you to file jointly or separately. Yes, that’s extra work. It’s also the best way to know how to come out ahead.

Know the tax brackets

This is where the major changes from the Tax Cuts and Jobs Act start to kick in. The bill changed all the tax brackets. While this won’t affect how you file in taxes in 2019, it might affect whether or not your receive a refund, especially if you didn’t check your tax withholding this year to make sure the right amount of money was coming out of your monthly paychecks.

The tax brackets as of 2018 are:

For single taxpayers
Bracket Rate
$0 to $9,525 10%
$9,526 to $38,700 12%
$38,701 to $82,500 22%
$82,501 to $157,500 24%
$157,501 to $200,000 32%
$200,001 to $500,000 35%
$500,001 & over 37%


For married filing jointly
Bracket Rate
$0 to $19,050 10%
$19,051 to $77,400 12%
$77,401 to $165,000 22%
$165,001 to $315,000 24%
$315,001 to $400,000 32%
$400,001 to $600,000 35%
$600,001 & over 37%


For married filing separately
Bracket Rate
$0 to $9,525 10%
$9,526 to $38,700 12%
$38,701 to $82,500 22%
$82,501 to $157,500 24%
$157,501 to $200,000 32%
$200,001 to $300,000 35%
$300,001 & over 37%


For heads of household
Bracket Rate
$0 to $13,600 10%
$13,601 to $51,800 12%
$51,801 to $82,500 22%
$82,501 to $157,500 24%
$157,501 to $200,000 32%
$200,001 to $500,000 35%
$500,001 & over 37%


How tax brackets work

Tax bracket are not all that straightforward. (Who’d a thunk it, right?) You don’t make, say, $80,000 and get taxed at 22% for all those dollars. The system’s progressive. Assuming you’re single, the first $9,525 you make gets taxed at 10%, the next $9,526 to $38,700 gets taxed at 12% and the remaining amount (given the next tax bracket is $38,701 to $82,500) gets taxed at 22%.

This is confusing, but also important so (a) you don’t try to needlessly claw your way into a lower tax bracket and (b) you get an accurate estimate of your tax bill before you must pay it.

Decide if you’re taking the standard deduction

Deductions lower your taxable income. The standard deduction is the most basic way to approach this. In lieu of listing every qualified expense that ate into your net worth during the year, you claim a fixed amount associated with your filing status.

The tax law practically doubled the standard deduction for all filers, so for tax year 2018, many former itemizers might find themselves taking the standard deduction.

For tax year 2018, the standard deduction is:

  • $12,000 for single filers

  • $12,000 for married filing separately

  • $24,000 for married filing jointly

  • $18,000 for heads of households

If you don’t take the standard deduction, you’re itemizing. People itemize when (a) their deductions exceed the standard deduction or (b) they can’t take the standard deduction, because there are exemptions. For example, someone who’s married filing separately is ineligible if their spouse itemizes deductions. If you’re itemizing, you need to …

Know your deductions & exemptions

Let’s start with deductions. There are a bunch of them, but, for the sake of simplicity — which, again, is what we’re going for — here are the most common ones, along with some notes about the bigger changes coming into effect this year.

Mortgage interest deduction: You can deduct the interest paid on up to $750,000 in mortgage debt on your primary home and, sometimes, a second one. Prior to the passage of the tax law, you could deduct the interest paid on up to $1 million in mortgage debt on your home. People who purchased a home before Dec. 15, 2017 are grandfathered into that higher threshold.

State & local tax deduction: Itemizers can still deduct state income, sales and property taxes, but those deductions are now capped at $10,000.

Student loan interest deduction: You can deduct up to $2,500 of interest paid on student loans.

Charitable donations: Itemizers can deduct donations made to eligible organizations. The deduction can’t exceed 60% of your adjusted gross income (up from 50% in prior tax years). Plus, you’ll need the receipts.

Medical expenses: You can deduct out-of-pocket medical expenses exceeding 7.5% of your adjusted gross income for tax year 2018. It is expected to go back up to 10% for most Americans in 2019.

Health savings account contributions: Money put into an HSA, which helps with out-of-pocket medical expenses, is tax-exempt. In 2018, you can deposit up to $3,450 if you’re a single filer or $6,900 for families. Learn how to open an HSA.

Individual retirement contributions: You can deduct traditional individual retirement account contributions, depending on your income, filing status and whether you have a retirement plan at work. Contributions are limited, too: In 2018, you can put up to $5,500 or, if you’re age 50 or older, $6,500, into an IRA account.

Genius tip: You can make retroactive HSA and IRA contributions up until April 15, 2019, so there’s still time to score those tax breaks. Learn how to open an IRA.

Other big changes under the Tax Cuts & Jobs Act

Personal exemption: In prior tax years, you could claim a personal exemption, so long as no one else claims you as a dependent. But the GOP tax plan did away with the personal exemption, starting in 2018 through 2025. The impact this could have on your taxes will vary, because, remember, the standard deduction has nearly doubled.

No limit on itemized deductions: The rule limiting the total itemized deductions for certain higher-income individuals has been suspended.

Moving expenses: In prior tax years, you could deduct some moving expenses if you relocated because of a job change. But the tax bill suspended this deduction from 2018 through 2025.

Deducting interest on a home equity loan: You can now only do so if you used the the loan to buy, build or substantially improve your primary home or second home.

Alimony payment deductions: The deduction for alimony payments won't apply to any divorce finalized after Dec. 31.

Don’t forget credits

Credits, unlike deductions, get subtracted from your actual tax bill, not your taxable income. Tax credits come in two flavors: refundable and non-refundable. Refundable credits can reduce your liability beyond $0. Non-refundable credits don’t. There are a bunch of credits, but here are the most common.

Earned income tax credit: A refundable break for low-to-moderate income families; the amount varies based on your number of children and income. There’s a bunch of boxes you need to check off to qualify for the EITC, but, as a benchmark, if your earned income and AGI exceeds $53,930, you’re definitely not eligible.

Child tax credit: A non-refundable credit of up to $1,000 per qualifying child; eligibility is determined by age, relationship, family income and more.

Child & dependent care credit: A non-refundable credit for paying someone to look after a dependent while you work; the amount is between 20% and 35% of your allowable expenses ($3,000 for one dependent; $6,000 for two or more), depending on your AGI.

Savers credit: A non-refundable tax credit that offsets the first $2,000 low-to-moderate income workers save for retirement. Eligibility varies by filing status and AGI.

American opportunity credit: A partially refundable tax break for students paying for college. The maximum annual credit per student is $2,500.

Lifetime learning credit: Another tax break for students, this non-refundable credit is worth up to $2,000, depending on income and filing status.

Mind your penalties

This is the stuff that will up your tax bill. Penalties aren’t abundant, per se, and you’re probably familiar with most of them, but here’s an overview of what can increase your tax bill.

Early withdrawals: In most cases, if you withdrew money from a retirement account during the tax year and you’re not at least 59-and-a-half, you must pay an additional 10% early withdrawal tax. There are some exemptions, though. For instance, first-time homebuyers can take up to $10,000 out of an IRA for their house, sans penalty.

Missed minimum distributions: Conversely, once you hit age 70-and-a-half, you have to start withdrawing from retirement accounts, including 401(k)s, traditional IRAs, SEP IRAs and SIMPLE IRAs. If you didn’t make your minimum distribution by Dec. 31, 2018 (or April 1, 2019 if you turned 70-and-a-half this tax year), you’ll pay a 50% excise tax. Minimum distributions vary by age and marital status.

Failure to file/failure you to pay: The exact charge depends on where you went wrong (failure to file costs more), how long you go AWOL, how much you owe and whether you enter a payment plan. There are also penalties for bouncing checks, underpaying or misreporting what you owe.

Filing late: If you miss the April 15 deadline — and didn’t get an extension — you face a penalty of 5% of the unpaid taxes each month the return remains late. That penalty accrues the day after your due date, but won’t exceed 25% of the unpaid taxes.

Not having health insurance: Yes, the GOP tax bill repealed Obamacare’s individual mandate, but it was still in effect for tax year 2018, so, if you went without a health care plan last year, you face a penalty of either 2.5% of your taxable income or $695, whichever is greater. The repeal is in effect as of tax year 2019.

How to file your taxes

OK, now you (more or less) know what’s up. It’s time to file. Again, you have a choice to make: How should you do your taxes? The best option varies, depending on how much time you have, how complex your returns are and how tax-savvy you are. Still, technically, everyone has three options.

  1. Do-it-yourself: Yeah, going old-school probably isn’t your best bet if your taxes have a lot going on. However, if you’re filing a fairly straightforward 1040, you could give it a go. It’ll certainly save you some dough: Filing via good old paper and pen pretty much only requires paying for postage. (You can download all the forms you need from the IRS website.) But, if you make under $66,000 a year, you can actually e-file for free. There are also volunteer groups work with the IRS to provide free tax assistance to qualifying individuals.

  2. Use tax software: If your taxes are all Baby Bear (you know, not too hard, but not too easy), basic tax software, like TurboTax, is probably the way to go. It’ll take a little time, but you’ll pay less for the goods than you would to a tax preparer.

  3. Hire a professional: If you’ve got a complicated estate, the expertise of a reputable, licensed tax preparer is probably worth their fees. Ditto for if you have zero time to do your taxes. But notice how we specify using a reputable tax preparer. That’s because there are, unfortunately, scammers out there. To avoid getting got, make sure a prospective preparer has a Preparer Tax Identification Number (they’re required to by law). And check with the Better Business Bureau or online review sites to see how past clients rate them.

Once your taxes are filed

Do a paycheck checkup. That is, make sure your employer is taking the right amount of money out of your paycheck during the year. Otherwise, you could owe big next April or wind up giving Uncle Sam an interest-free loan during 2019.

You can plug some basic information from your pay stubs into the IRS’ withholding calculator to get a tailored recommendation for how much you set aside for taxes. Once you have this recommendation, ask your employer for a W-4 form to change your withholding. Some companies let employees fill out the form online.

Recommended reading

To help you build your expertise, here are some useful tax resources from around the web.

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