2019 Numbers You Need To Know

As you build your 2019 business plans, keep in mind the following inflation-adjusted figures that help to put planning strategies in context.

FEDERAL INCOME TAX & TAXABLE EQUIVALENT YIELD

Tax-free Yield
Filing Status Federal Taxable Income Federal Income Tax Bracket 1.50% 2.00% 2.50% 3.00%
Taxable Equivalent Yield
Married Filing Jointly $0 -19,400 10.00% 1.67% 2.22% 2.78% 3.33%
$19,401 – 78,950 12.00% 1.70% 2.27% 2.85% 3.41%
$78,951 – 168,400 22.00% 1.92% 2.56% 3.21% 3.85%
$168,401 – 321,450 24.00% 1.97% 2.63% 3.29% 3.95%
$321,451 – 408,200 32.00% 2.21% 2.94% 3.68% 4.41%
$408,201 – 612,350 35.00% 2.31% 3.08% 3.85% 4.62%
Over $612,000 37.00% 2.38% 3.17% 3.97% 4.76%
Single $0 – 9,700 10.00% 1.67% 2.22% 2.78% 3.33%
$9,701 – 39,475 12.00% 1.70% 2.27% 2.84% 3.41%
$39,476 – 84,200 22.00% 1.92% 2.56% 3.21% 3.85%
$84,201 – 160,725 24.00% 1.97% 2.63% 3.29% 3.95%
$160,726 – 204,100 32.00% 2.21% 2.94% 3.68% 4.41%
$204,101 – 510,300 35.00% 2.31% 3.08% 3.85% 4.62%
OVER $510,300 37.00% 2.38% 3.17% 3.97% 4.76%

The taxable equivalent yields assume the highest marginal tax rates applicable to the income level.

TAX ON DIVIDENDS & LONG-TERM CAPITAL GAINS

Tax Rate Single Married Filing Jointly
0% $0 – 39,375 $0 – 78,750
15% $39,376 – 434,550 $78,751 – 488,850
20% Over $434,550 Over $488,850

Short-term capital gains (on assets held 1-year or less) are taxed at the ordinary income tax rate.

INDIVIDUAL AMOUNT

Filing Status
(Flat rate 26%)
Exemption 28% Rate Applies to Income Above: Phase-out income level
Single $71,700 $191,500 $510,300
Married Filing Jointly $111,700 $191,500 $1,020,600
Married Filing Single $55,850 $95,750 $510,300
Estates & Trusts $25,000 $191,500 $83,500

2019 STANDARD DEDUCTION

2017 2018 2019
Filing Status Annual Additional
for age 65+ or blind
Annual Additional
for age 65+ or blind
Annual Additional
for age 65+ or blind
Married Filing Jointly $12,700 $1,250/ $2,500 $24,000 $1,300/ $2,600 $24,400 $1,300/ $2,600
Single $6,350 $1,550 $12,000 $1,600 $12,200 $1,650
Head of Household $9,350 $1,550 $18,000 $1,600 $18,350 $1,650

Personal exemptions have been eliminated by the 2017 Tax Act and replaced with the higher standard deduction. Married couples can take the additional deduction indicated as long as at least one of the two is age 65. If both are age 65, double the additional amount can be deducted.

CORPORATE TAX & AMT

Corporate Flat Tax Rate
Corporate Tax Rate Flat 21%
Corporate AMT Eliminated

199A INCOME THRESHOLDS FOR PASS-THROUGH ENTITIES

199A Income Thresholds
2018 2019
Married Filing Jointly $315,000 $321,400
Married Filing Single $157,500 $160,725
Single $157,500 $160,725
Head of Household $157,500 $160,725

The 2017 Tax Act added IRC Section 199A that includes a special deduction for businesses that do not operate as a C-corporation and instead “pass- through” their qualified business income (QBI) to their individual tax return. Businesses structured as Sole proprietorships, and partnerships set up as limited liability companies (LLC) or Family Limited Partnerships (FLP), as well as S-Corporations and trusts may be able to deduct 20% of QBI under 199A. Certain service businesses structured as pass-throughs — such as law firms, accounting firms, investment firms and physician practices — can take advantage of the 20% write-off only if taxable income is less than the 199A threshold amount. The 20% deduction is phased out for taxable income above the threshold.

2019 CONTRIBUTION AND COMPENSATION LIMITS FOR QUALIFIED RETIREMENT PLANS

Limit 2018 2019
Pre-tax deferrals under 401(k), 403(b) & 457(b) plans $18,500 $19,000
Catch-up contributions for participants age 50 or older $6,000 $6,000
Defined Contribution Plan annual contribution limit $55,000 $56,000
Defined benefit plan annual benefit/accrual limit $220,000 $225,000
Annual compensation limit $275,000 $280,000
Highly compensated employee – definition $120,000 $125,000
Key employee- definition for Top-Heavy plans $175,000 $180,000
Threshold to lengthen distribution period under an ESOP $220,000 $225,000
ESOP limit to determine the max balance subject to 5-year distribution period $1,105,000 $1,130,000
Pre-tax deferrals under SIMPLE 401(k) or SIMPLE IRA $12,500 $13,000
SIMPLE 401(k)/IRA catch-up contributions (age 50 or older) $3,000 $3,000
Traditional/ROTH IRA contribution limit $5,500 $6,000
Traditional/ROTH IRA catch-up contributions (age 50 or older) $1,000 $1,000

TRADITIONAL IRA DEDUCTIBILITY

Filing Status Employer Retirement Plan? Modified AGI 2019 Deductibility
Single No Any amount Full
Yes $64,000 or less
$64,000 – $73,999
$74,000+
Full
Partial
None
Married Filing Jointly Neither spouse covered Any amount Full
Yes. Spouse is either covered or not $103,000 or less
$103,001-$122,999
$123,000+
Full
Partial
None
No. But spouse is covered $193,000 or less
$193,001 – $202,999
$203,000+
Full
Partial
None

ROTH IRA CONTRIBUTION PHASE-OUT

ROTH IRA Contribution Income Phase-out
Married Filing Jointly Married Filing Separately Single Filer
$189,000 – $199,000 $0 – $10,000 $120,000 – $135,000

No annual income limit applies to a ROTH IRA conversion.

SOCIAL SECURITY

Base Amount of Modified AGI Causing Social Security Benefits to be Taxable
2019
50% Taxable 85% Taxable
Married Filing Jointly $32,000 $44,000
Single $25,000 $34,000
Maximum Earnings Before Social Security Benefits Are Reduced
2018 2019
If under full retirement age, lose $1 for every $2 earned $17,040 $17,640
In year of retirement, lose $1 for every $3 earned in months prior to full retirement $45,360 $46,920
At full retirement age (FRA) No Limit No Limit

Individuals with a modified adjusted gross income of $85,000 or more and married couples whose joint income exceeds $170,000 pay a high-income surcharge on both their Medicare Part B premiums and Part D prescription drug plans. Surcharges, officially known as an income-related monthly adjustment amount, or IRMAA, are based on the last available income tax return.

Maximum Compensation Subject to FICA (Social Security) Taxes
OASDI (Social Security) Maximum $128,400 $132,900
HI (Medicare) Max No Limit No Limit

LONG-TERM CARE INSURANCE PREMIUM DEDUCTIBILITY

Base Amount of Modified AGI Causing Social Security Benefits to be Taxable
Age 40 or less 41-50 51-60 61-70 Over 70
2018 $420 $780 $1,560 $4,160 $5,200
2019 $420 $790 $1,580 $4,226 $5,270

HEALTH SAVINGS ACCOUNT (HSA) LIMITS

Filing Status Annual Contribution Limit
2018 2019
Single $3,450 $3,500
Family $6,900 $7,000
Catch-up (age 55+) $1,000 $1,000

FEDERAL ESTATE, GIFT & GENERATION-SKIPPING TAX EXEMPTIONS & RATES

2017 2018 2019
Annual Exclusion Gift
Single $14,000 $15,000 $15,000
Married Couple/ Gift Splitting $28,000 $30,000 $30,000
Gifts to Non-citizen Spouse $149,000 $152,000 $155,000
Lifetime Gift Tax Exemption
(Indexed)
$5,490,000 $11,180,000 $11,400,000
Maximum Gift Tax Rate 40% 40% 40%
Estate Tax Exemption (Indexed with portability 1) $5,490,000 $11,180,000 $11,400,000
Maximum Estate Tax Rate 40% 40% 40%
Generation-Skipping Tax (GST) Exemption
(Indexed)
$5,490,000 (no portability) $11,180,000 (portability) $11,400,000 (portability)
Maximum GST Tax Rate 40% 40% 40%
Special Use Valuation (IRC 2032A) $1,120,000 $1,140,000 $1,160,000
Section 6166 2% limit – deferred estate tax $1,490,000 $1,520,000 $1,550,000
States with Estate or Inheritance Taxes CT, DC, DE, HI, IL, IA, KY, ME, MD, MA, MN, NE, NJ, NY, OR, PA, RI, VT, WA

1 Portability of the federal estate tax exemption is defined as if one spouse dies and does not make full use of his/her exemption, the surviving spouse can make an election to utilize the deceased spouse’s unused federal estate tax exemption in addition to his/her own exemption.