New Tax Laws For 2019 Explained! (2019 Tax Reform) (2019 Federal Income Tax Rules)

New Tax Laws For 2019 Explained! (2019 Tax Reform) (2019 Federal Income Tax Rules)


in 2019 tax law continues to evolve but
guess what we’re gonna evolve right along with it to help you conquer your
taxes in 2019! I’ve put together a free downloadable spreadsheet for you packed
with more information than ever before not only do I think this spreadsheet
will help you plan your taxes better for 2019 and beyond but I think it also may
help you with financial planning as well I released the video on the 2018 tax
updates last year and had an overwhelmingly positive response thanks
to all of you guys so I wanted to make a follow-up video to that and I will
continue to make a tax update video every single year as long as you guys
would like me to with that being said I don’t want to waste any more time I want
to just dive right into the information but I do have a quick favor to ask if
you guys enjoy the video please let me know by crushing that like button or
just let me know down in the comment section below what do you think of all
these new tax laws how is it impacting you is it impacting you in a good way
bad way or whichever I would love to hear your thoughts down below by doing
that it’s gonna help this information reach more and more people thank you
very much and let’s get started now when I think of tax one of the things every
single year I like to look at first because these numbers change every
single year is the tax brackets themselves I’m always wondering what tax
bracket am I in now or what is my highest tax rate so on screen what you
guys are seeing is you’re seeing the tax brackets are the tax tables and you’re
gonna see I have listed it now for if your file single married filing separate
head of household and married filing joint now you can feel free to pause the
video as we go through this worksheet I’m not gonna read all these numbers to
you off on screen however if you look over to the left-hand column you’re
gonna see some percentages those percentages are tax rates and they’re
not just any tax rates they’re marginal tax rates which means when you see that
percentage let’s take a look at the 22 percent for example what that means is
if you fall into the 22 percent tax brackets based on your income and filing
status that means 22 percent is the highest amount of tax you’ll pay on each
additional dollar earned that’s what marginal tax is it’s the
highest of tax you and I pay on each dollar we
earn now in case you don’t know this is different from your effective tax rate
that’s very different it’s very important to learn the difference
between your marginal tax rate and your effective tax rate if you don’t know
what that is don’t worry I’ve actually made a video on that I’m gonna post a
link to the video down in the description section below so make sure
to check it out if you want to learn more about that moving on down the line
now let’s talk about investments and long-term capital gain rates in the
spreadsheet this year what I’ve done is I’ve included the actual long-term
capital gain rates on the spreadsheet itself so you guys can see what they are
what’s great about long-term capital gain rates is it’s one of the most
advantageous tax rates you can get Nixa taxes emp’d income there’s really not
much that’s better as you can see here from the graph or from the from the
spreadsheet is that if your income is low enough when you go to sell assets
now typically we’re talking about stock sales that’s the most common thing
people sell on a regular basis but you can see if your income is low enough
when you go to sell your stocks first for example you’ll pay 0% tax on that
income the important thing to remember about long term capital gains is that
you have to hold the investment for longer than a year before you sell it
the next thing we’re seeing is that in 2018 the standard deduction has gone up
a little bit and this is this is very typical it usually increases every
single year so in 2018 if you were single for example your your standard
deduction was $12,000 but in 2019 it has gone up to twelve thousand two hundred
and remember your standard deduction what it does is it it’s a set amount of
the deduction you get automatically when you go to file your taxes that’s gonna
reduce your taxable income by that amount so if you made a hundred grand in
2019 you would subtract in your filed single you would subtract the standard
deduction from it of twelve thousand two hundred dollars and what is left over is
your taxable income for the year I have a whole video that explains how the
standard deduction works and itemized deduction works that I’ll link up in the
description section of the video personal exemptions this one I still get
a lot of questions about even in 2019 people are still very very on a
they’re that personal exemptions are no longer applicable so just keep that in
mind now the the dependency rules of the rules to claim a qualifying child are a
qualifying relative those are still in place and you it’s really important you
know those rules to help you claim things like credits so it’s just
education credits the child tax credits the Earned Income Credit and so on and
so forth so knowing all those rules is still very important it still applies
even under the new tax cuts and Jobs Act that started in 2018 speaking of tax
credits let’s talk about the child tax credit amounts have not changed the
amounts with a credit have not changed but I just want to clarify that the the
credit is up to $2,000 per child or it’s refundable up to $1400 per child
depending upon a person’s particular tax situation so in some instances you might
get the full two thousand in other instances you might not it all depends
on your overall income and what else is going on in your tax return that
determines that but the child tax credit I can see this year when doing people’s
taxes that it is helping a lot of people because they’ve greatly increased the
income phase-out limitations on that so a huge chunk of society is now able to
take advantage of this credit the next area I want to cover is state and local
income taxes are salt and this is still limited the this is found on schedule a
which is covers itemized deductions your total state and local income tax
deductions is still capped now at $10,000 that hasn’t changed to my
knowledge so I actually got a phone call from my uncle just the other day and he
wanted to know why he’s paying more in taxes year than in previous years
well I said you usually itemize he’s like yeah I do well he’s paying more tax
because his state and local income taxes are now limited to $10,000 which
unfortunately for some people that hurts them tax wise under these new tax laws
and so they’re able to they’re not able to get as large of a tax deduction when
itemizing as they once were so that might happen to you as well so
look out for that kind of continuing on the same form now of itemized deductions
and schedule a is mortgage interest deductions
now these rules are still the same so if you got your mortgage prior to 2018
before these new laws came into effect the mortgage acquisition indebtedness
rules are still the same so what that means is you can still deduct interest
on a mortgage that is up to a million dollars starting in 2018 2019 what
happened is now you’re limited so your your basically your mortgage cannot
exceed once your mortgage debt exceeds $750,000 any interest you pay above that
amount is limited so your your but if your mortgage is less than $750,000
you’re still going to be able to deduct your mortgage interest just not as much
if your if your mortgage is a million or more the if that makes sense
and obviously home equity interest is no longer deductible miscellaneous itemized
deductions are still no longer applicable a lot of people I’ve had
people ask me this all of last year and even in this year if they can deduct
their vehicle mileage their union dues uniforms and things like that
unfortunately because they’ve changed schedule a or autumn eyes deductions you
can no longer deduct those things as an employee now if you’re a business owner
and you have to drive a lot for your business to different places then
absolutely you can still deduct those miles you might be able to deduct your
vehicle expenses and things like that but if you’re an employee of a company
unfortunately you’re there’s gonna be no mileage reimbursement or anything like
that or deduction I should say on Schedule A
for you so just keep that in mind one of the new things I’ve added to the form
this year which I think you guys will like is a spot for education so the
education deductions are still pretty much the same as they used to be in
years past so the most favorable education deduction in the way you
deduct education expenses is actually through tax credits and there’s two
primary tax credits the first one is the American Opportunity Credit and the
second one is the Lifetime Learning credit with the American Opportunity
Credit this is a credit you can get on your first four years of post-secondary
education so basically once you get out of high school let’s say you go to a
community college for two years you go to a been to a like a State University
for the next two years so for those first four years you can
claim that credit the American Opportunity Credit and what that’s gonna
give you is up to a $2,500 max deduction or it’s a refundable
credit so you can actually get it up to $1,000 of that credit refunded to you if
you owe no tax it’s one of those situations where the way the credit will
impact your tax return is based on how your whole tax return plays out and
whether or not you owe tax in the end student loan interest is still
deductible up to $2,500 per year if you’re below certain income threshold
phase-out amounts and the force the Lifetime Learning credit is still
available it’s gonna give you up to a $2,000 tax credit if you qualify for it
and that’s typically for somebody who’s been in school longer than four years
pursuing their bachelor’s or somebody who’s trying to obtain a master’s degree
the next thing I’ve added to the spreadsheet for you guys this year is
the 401k contribution limits now notice that from 2018 to 2019 the maximum
contribution amount if you’re under age 50 has increased by 500 bucks to $19,000
and if you’re 50 at age 50 and up your maximum amount you can contribute now is
$25,000 now for IRAs whether it be a Roth IRA or a traditional IRA your
deadline to contribute the money is April 15th that’s still the same the
contribution limits they haven’t changed for years but they finally just changed
so for a long time now since I think 2013 the contribution limits have been
$5,500 now they finally increased them starting in 2019 to $6,000 per year as
you guys know if you watch my videos and follow my my channel that I am full
heartedly invested in a Roth IRA and I my wife and I maxed out a Roth IRA every
single year so this year instead of being able to put 11,000 in total we’re
gonna be able to put 12 thousand which is gonna be pretty nice and of course if
you’re over the age of 50 you can contribute even more to that which the
spreadsheet shows you guys right here before I forget to mention it the
spreadsheet that you’re seeing that’s the maximum amount per person so each
person can contribute six thousand dollars a piece I just want to clarify
that before I forget now for those of us who are receiving Social Security in
2019 you can finally expect a little bit
above average cost of living adjustment instead of 2% it’s gonna be around 2.8
or 2.9 percent in 2019 which hopefully you’re already receiving and benefiting
from the next big thing that is very specific to 2019 is the change in
alimony rules in terms of whether or not it’s deductible now starting in 2019 any
divorce or alimony agreement that comes to fruit Asian in 2019 you’re gonna be
stuck under those these new tax law rules so which means that if you have an
alimony agreement now or get divorced in 2019 and beyond that alimony you pay out
to your ex spouse is no longer tax deductable now for those of you who have
who already had a alimony agreement in play before 2019 you should be fine
there’s you’re still gonna be able to do the act at alimony payments to your ex
spouse on your tax return as an adjustment to your income that was only
for any new court-ordered alimony agreements that occur after 2019 now I
don’t have any clients who were thinking about divorcing or anything like that
but if I did in 2018 I was thinking of the back of my mind would be like if you
want to divorce this person it’s either time to fish or cut bait it’s either
time to poop or get off the pot it’s time the paint or get off the ladder
well you guys get the idea another new thing I’ve added to the spreadsheet this
year is the annual gift tax exclusion now this doesn’t affect a lot of people
so I’m not going to spend much time on it but what it means is that you can
gift every year up to $15,000 to somebody without having to file a gift
tax return that can that gift can be cash or property you know ownership in a
business or things like that so every single year you can gift up to that
amount starting in 2019 without any tax return filing requirement for a gift if
you ever do need to if you ever do gift more than that to somebody let’s say you
give somebody $50,000 well then you would have to file a gift tax return and
it’s a form 709 and just because you file a gift tax return doesn’t
necessarily mean you’ll pay tax but it’s just gonna eat into your lifetime
exclude for estate taxes which we’re going to
talk about next all right now on screen we’re looking at the federal estate tax
lifetime exemption amount so in the previous years video or a tax update I
did I’m not gonna I got a lot of feedback saying like why why did you cut
spend so much time here we’re not rich so thank you for your feedbacks as
though basically just just know that if you have an estate you can have an
estate with if you’re single up to eleven million one hundred eighty
thousand or if you’re married filing joint your estate can be worth twenty
two million three hundred sixty thousand it as long as it’s below those amounts
when you die you pay your estate your heirs will pay no estate tax so that’s
the only thing you really need to know there but most of us aren’t anywhere
near those levels including myself so let’s go ahead and keep moving forward
now there’s a number of people I interact with on YouTube who do pay
alternative minimum tax so the phase-out amounts and exemption
amounts are still the same but they’re still listed here I haven’t haven’t
changed anything there you guys are gonna like this in terms of the
Affordable Care Act so for the last several years we’ve been subject to ACA
penalties if we did not have full coverage health insurance or you know
health care coverage the full years I what I’m trying to say starting in 2018
that if you don’t if you find yourself without health care coverage for the
full year you no longer have to worry about those penalties be showing up on
your tax return you’re no longer being penalized for not having health
insurance on screen you’re gonna see this box that talks about casualty theft
losses moving reimbursements and trail reductions I’m just gonna skip on past
that you guys can go back and read that at any time another new thing I’ve added
to the worksheet this year is health savings accounts deductions if you
qualify for a health savings account I would certainly recommend you look into
it it’s a great and very easy way to shave off a lot of tax every single year
and what it does is that if you contribute to a health savings account
you are able to reduce your taxable income by that amount it’s just like
when you it’s it’s kind of similar to when you put money into a 401 K is when
you put money into a 401 K you’re basically deferring tax to a future date
but when you put your money into your health savings account you automatically
get a taxi for that year and it’s kind of like
getting a discount on all of your medical expenses moving forward so I’ve
included the contribution limits as you can see here if you’re single the
maximum contribution limit is 3500 if you have a family it’s up to you can
contribute up to 7000 per year if you’re over the age of 55 but not receiving
Medicare you can contribute an extra grand or you can contribute the next
year thousand per qualifying spouse now some of the rules you need to know about
in order to qualify to be able to even open a health savings account is that
you’re based on the type of health insurance you have your minimum
deductible has to be at least twenty seven hundred dollars or 1350 if you
have a family you’re a maximum out-of-pocket as a minimum is six
thousand seven hundred fifty if you file single if you’re married flying joints
your maximum out-of-pocket limit should be around thirteen thousand five hundred
or more the health savings account I’ll tell you guys for my personal experience
I maxed it out every single year and I haven’t had to stress about medical
bills for years it began and we have I think I have like I got almost fourteen
thousand dollars of my health savings account now and so you know knock on
wood that I stay healthy but so far so good it’s been a great way for me to set
aside money for medical bills if I ever need them and reduce my taxes at the
same time Nick’s on here I’ve listed the amounts for the adoption tax credit
those have gone up a little bit and the I’ve also listed some information for
their earned income credit in the psyllium Plateau so based on the number
of children you have there’s credit percentage ranges and income amount
plateaus that you’ll run into that will determine how much of the credit you can
receive or if you qualify now I’ve gotten a lot of requests to do a video
on to earning income taxes so look for a video on that later this year the last
thing I’ve included on the spreadsheet for you guys is just a brief synopsis
regarding the qualified business income deduction which is known as qbi or the
twenty percent business income tax deduction I I just included that little
snippet of information the phase-out ranges on the income have actually
increased a little bit I didn’t update it here but just so you know I do have
two completely separate videos that go over that credit not credit but that
dude qpi deduction for $1.99 a in very very extensive
detail I’ll link that video up in the description section below
actually I got a lot of videos to link up for you guys so the I made those all
these other videos to help explain the stuff on this worksheet even more to
help you make more sense of taxes because what I find in the real world is
that people unfortunately because our education system doesn’t teach it
there’s a great misunderstanding that when it comes to taxes and does people
just don’t have the knowledge regarding it and so I hope with these videos I
produce on this channel to help fill in the gaps there
well okay everybody this has been your tax update for 2019 these are some of
the most important items that have changed and just to give you an update
on the numbers I’m gonna continue to do this each and every year as long as you
guys want me to if you want me to do a tax update video for 2019 for businesses
just let me know in the comments section if I see enough requests for it I’ll
definitely put another one together like I did last year I think a lot of people
found that helpful so jus but just let me know what you guys think alright guys
if you like the video like I said earlier please drop a like show this
information with a friend especially somebody who needs to learn about all
these new tax rules I find that people don’t know about this stuff and it’s
very important that they get this information in their hands there’s very
few places if any on the entire internet where you can find this much information
summarize what’s upside-down summarized all in one place but I hope to be able
to do this for you guys every single year and make this spreadsheet better
and better and better for you guys every single year and it will always remain
completely free free free free free free free free free free free free free free
free free free free our goal and mission here on money and live TV is to help you
become fiscally fit and we do that by teaching finances investing taxes and
more on a regular basis so be sure to subscribe to not miss any of our future
uploads alright everybody well thank you so much
for being here today I know it takes time out of your day to be here and
watch these videos but I really do appreciate it I appreciate all the
support you’ve given me on the channel over the past two years it’s been
phenomenal watching this community grow and I just feel so honored that you’re a
part of it let me know your thoughts comments questions whatever it may be
down in the comments down below I’ll look forward to reading
what you guys have to say and until next time you know what to do take this
information and use it to live your life on caged and I’ll see you in the next
one have a great week everybody pace

Posts created 19620

58 thoughts on “New Tax Laws For 2019 Explained! (2019 Tax Reform) (2019 Federal Income Tax Rules)

  1. Your 2019 tax update has arrived! I would greatly appreciate if you can help crush that like button and/or share this information with others. I was overwhelmed by the amount of positive feedback I received after the 2018 tax update video was produced so I wanted to make a follow up and will continue to make one new tax update video per year as long as you guys would like me to.I really hope you find this helpful. Thank you so much for the support everyone. You all make this worthwhile, and I’m honored to have you. I made a few additional updates to the spreadsheet after the video was produced.

  2. You can follow the link here to download the spreadsheet: https://www.dropbox.com/s/3p1dpvvvaycf9o5/2019%20tax%20updates.xlsx?dl=0

  3. Video Outline and Time Stamps so you can quickly jump to any topic:

    • The 2019 Federal Income Tax Bracket Rates – 1:09

    • 2019 capital gain rates for stocks and dividends – 2:36

    • Changes to the 2019 standard deduction – 3:26

    • 2019 Personal Exemptions – 4:21

    • Child tax credit rules for 2019 – 4:59

    • 2019 State and local tax law changes – 5:44

    • 2019 Mortgage interest deductions – 6:34

    • 2019 Miscellaneous itemized deductions – 7:29

    • 2019 Education Credits and 2019 Student loan interest- 8:10

    • 2019 401(K) Contribution Limits and 2019 IRA Contribution Limits- 9:10

    • 2019 Social Security Cost of living adjustment 11:00

    • Alimony rules for 2019 – 11:18

    • 2019 Gift tax exclusion 13:25

    • 2019 Federal Estate Tax Exemption – 15:42

    • Alternative Minimum Tax – 14:05

    Other related videos:

    My complete tax video playlist can be found here: https://www.youtube.com/channel/UCDkT7dDW13fwBGm2jW7JVTw/videos?sort=p&view_as=subscriber&shelf_id=7&view=0

    Marginal tax rate vs. effect tax rate: https://youtu.be/uCFmdlBvQXI

    Capital Gain Tax Rules Explained: https://youtu.be/BCQYorPgDKs

    Itemized Deductions Explained: https://youtu.be/L3puG8G6HSg

    How do tax withholdings work? W-4 Explained: https://youtu.be/qKTYi2Xakx0

  4. So far the tax laws seemed to have helped me slightly. I actually got back a small refund which is better than owing money to the IRS.

  5. Thank you, Mike, for that free download! You and your wife sure are on the path to financial freedom in your retirement years…way to go!
    BTW, HELOC interest deduction IS allowed ONLY if the HELOC loan was used to “buy, build or substantially improve” 🙂 the home that secures the loan. My personal example: I used the loan to purchase the foreclosed house next door. Ii had the house torn down, and combined the two lots, thus doubling my lot's size, and "substantially improving" my home's value with 2X the size yard. Win, win 🙂
    Be well, and have a great week!

  6. 3:45
    do i get a standard deduction as a 1099 worker? i get a w9 at the end of the year
    12:55
    this has me thinking, can you write off Christmas presents/birthday presents lol?
    17:40
    so i get a 20 percent deduction on taxable income as a 1099 worker? or did i misunderstand

    thank you so much for the video man! very helpful and you explain very well, i ask these questions just so i can be certain i understand

  7. Great video, Mike. I smashed the like button. One thing, are you 100% sure your tax bracket amounts shown in the Dropbox sheet isn’t of the 2018 IRS tables? According to NerdWallet and the Taxinformation.com they are different. Have a great day!

  8. The check box for "Full-year health care coverage or exempt" (2018) … what does "exempt" encompasses? This word "exempt" include the hardship exemptions?

  9. Hi Mike. Thank you SO much for taking the time and producing these videos! I just found your channel since I decided to start doing my own taxes and your explanation has helped immensely. Love your enthusiasm. I hope you continue to do this since it is super useful 🙂

  10. I’m a little confused regarding how the Roth IRA is taxed. I know the $5,500 contribution into the Roth IRA is taxed every year, while the traditional IRA is only taxed after pulling money out during retirement. I just went to file my taxes yesterday for 2018, and the person who was doing my taxes said NOT to worry about reporting that $5,500 contribution I made…because that $5,500 was AUTOMATICALLY already taxed when I funded the Roth IRA? Is that true? Because I thought I had to mention it every year during tax filing so the person doing my taxes would know how much taxes I would have to pay total with the Roth IRA’s $5,500 added. Am I under that wrong impression that Roth IRA’s yearly contribution amount has to be mentioned during tax filing…yet when in actuality I don’t have to and that it’s automatically passively taxed?

  11. You scared me for a moment at 16:04 haha. I think you switched the minimum deductible values.
    Just found your channel today & it's been super helpful! Thanks for sharing your knowledge 😀

  12. Regarding the Flexible Spending account, you said you had $14,000 in your HSA/FSA? but they dont allow you to roll over more than $500 to the next year so how is that possible ? I also live in CA.

  13. great insight to my taxes and where to look at least. My tax guy just rushes me out of the door to get the next victim in.

  14. On the Federal Estate Tax lifetime amount.

    If you move the estate into a Trust and transfer the trustee upon death do you eliminate the Estate tax?

  15. Question on the taxable amount on the tables i.e. the >$9700-$34K… is this figure the money you make annually or the amount of taxable income you made in the given period you are paying for? Thanks!!!

  16. GREAT VIDEO SuperMike! I really like the control we have with the old W4 form, my husband and I are drawing down a 401K to pay off our house @ about $40k per year and because they withhold 20% federal from that distribution, most of our annual tax liability is paid, am I going to be able to limit my federal withholdings to an equivalent of married and 10 using this new form? Thanks for the info!!!

  17. Liked and subed. Thanks for the info. I’m 25 and have no idea about taxes. But I want to. And I’m very grateful for people like you who take time to share your knowledge in a way that is accessible to us for free. Much appreciated.

  18. I would love a video on taxes for small business owners like myself. Any help with large equipment purchases etc would be helpful. Also, I would like advice on cash management. How much should you keep in reserves? Thanks for all of your expertise.

  19. Very informative. Can I deduct my ira contribution from my business income? Please make a video about business deduction.

  20. Please, Please, Please make a 2019 Business Tax Law Update! My son just graduated from college and is working as an independent contractor (in Advertising/Video/Communications). I don't think he has a clue how much of his money is going to go to taxes, what type of insurance he needs, how to pay estimated taxes or how to keep track of expenses (mileage etc.). Also, is there any app or software he can use to help him keep proper records?

  21. Hey Mike, can I have some training with you, I am an accounting student, I can come where ever you are! I am in newyork ?

  22. Brand new subscriber and I absolutely love your content and the manner in which you deliver it. So digestible and easy to follow. Thanks so much for all you do. Currently in Tax School and your videos have been so helpful for me trying to understand much of the lingo in my textbooks.

  23. I offer a profolio that beat the Roth in all area , you can contribute more then $10,000 every year in the plan also is a tax shelter , have growth , protection and safety net plus more .

  24. Hi great info! I owe $40K and filed for an extention. Can I claim the education credit for paying cash for my son's summer college credit I paid 15k ?

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