WHAT IS NEW IN 2019

Starting January 1, 2019, Tax law changes

  • The Tax Cuts and Jobs Act. cuts individual income tax rates, doubles the standard deduction, and eliminates personal exemptions.
  • The top individual tax rate drops to 37 percent.
  • The Act cut the corporate tax rate from 35 percent to 21 percent beginning in 2018. The corporate cuts are permanent, while the individual changes expire at the end of 2025.

Individual Income Tax Rate

The Act lowers tax rates but keeps the seven income tax brackets.

Changes in withholding occurred by employees’ February 2018 paychecks. These rates revert in 2026.

The Act created the following chart. The highest tax bracket is $500,000 for single people and $600,000 for married couples. In 2018, they pay a 37 percent rate after exemptions and deductions. That’s lower than the 2017 rate of 39.6 percent.

The Act eliminates most itemized deductions. That includes moving expenses, except for members of the military. Those paying alimony can no longer deduct it, while those receiving it can. This change is effective for divorces signed in 2018.