Updates to Your 2019 Tax Return for Filing in 2020

‘Tis the season for friends, family, and holiday cheer! It’s the time of year when no matter where you live, life becomes busier than usual and we will say goodbye tax year 2018 and welcome tax year 2019! And we’re not the only ones who have been busy. Let’s take a look at the latest updates from the IRS that will apply to your future expat income tax.

The IRS announced Thursday the annual adjustments made to the 2019 tax brackets, which as customary, have been adjusted for inflation. We do have a little time to adjust ourselves, as these are the numbers for the 2019 tax year and will be used when filing your tax returns in 2020.

See the following table for the new rates:

2019 Tax Brackets
RateSingle FilersMarried Joint FilersMarried Filing SeparatelyHead of Household Filers
10%$0-$9,700$0 – $19,400$0 – $9,700$0 – $13,850
12%$9,701 – $39,475$19,401 – $78,950 $9,701 – $39,475 $13,850 – $52,850
22%$39,476 –  $84,200 $78,951 – $168,400 $39,476 – $84,200 $52,851 – $84,200
24%$84,201 – $160,725 $168,401 – $321,450$84,201 – $160,725$84,201 – $160,700
32%$160,726 – $204,100 $321,451 – $408,200$160,726 – $204,100$160,701 – $204,100
35%$204,101 – $510,300 $408,201 – $612,350$204,101 – $306,175 $204,101 – $510,300

The standard deduction for single filers will be $12,200 for single filers, $18,350 for head of households, and $24,400 for married joint filers.

Personal Exemption Amount

The Tax Cuts and Jobs Act eliminated the personal exemption amount.

Qualifying Health Insurance Coverage and The Affordable Care Act

In 2018, the penalty was $695. There will be no penalty for failure to maintain minimum essential health coverage in 2019.

Foreign Earned Income Exclusion

Now for the figure that many Americans living abroad have eagerly awaited: the Foreign Earned Income Exclusion (FEIE) limit for the year! For 2019, eligible taxpayers can exclude up to $105,900 vs. $103,900 for 2018 tax year. You may be able to reduce your US tax liability completely with this exclusion!

Are you still thinking about your 2017 taxes? Or haven’t yet filed? We’ve got you covered and we’re also running a special offer for a $1000 Hotels.com giveaway. Just complete a Federal Tax Return or Streamlined Filing Package with us between 11/15 – 12/15.

Retirement Plan Contributions

If you contribute to a retirement plan, here’s some good news! In 2019 the IRS will increase the employee contribution limit for 401(k), 403(b) and the majority of 457 plans from $18,500 to $19,000. And if you’re over 50, you’re eligible to save an additional $6,000.

IRA contributions, which last increased in 2013, will also increase from $5,500 to $6,000, and catch-up contributions for those who are 50 and older will remain at $1,000.

Need Assistance Filing Your Expat Taxes?

Our expat tax experts are standing to help you get your taxes wrapped up quickly so you can enjoy the holidays stress-free. Contact us with your specific tax questions and we’ll be happy to get back to you with the answers. Contact us today!

Free Guide: The 25 Things Every Expat Needs to Know About Taxes

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