United States Tax Change Highlights for 2019
Revised tax forms and reporting, elimination of the federal Health Care Coverage Shared Responsibility Payment, and Virtual Currency reporting highlight the changes for the U.S. this year...
Form 1040-SR
Form 1040-SR U.S. Tax Return for Seniors has been introduced for 2019. You can use this form if you were born before January 2, 1955. There is little difference between Form 1040-SR and Form 1040, but Form 1040-SR is easier to read!
Fewer Schedules
This year there are only 3 numbered schedules. Schedules 2 and 4 are combined into Schedule 2 where you report any additional taxes you may owe. Schedules 3 and 5 are combined into Schedule 3 where you report any credits that you didn't claim on Form 1040 or 1040-SR.
IRA and Pension Reporting
You now report IRA distributions and other pensions and annuities on separate lines: lines 4a and 4b on Form 1040/1040-SR for IRA distributions; lines 4c and 4d for pensions and annuities.
Capital Gain or Loss Reporting
In 2018, capital gain or loss was reported on Line 13 of Schedule 1. In 2019, it will be reported on Line 6 of Form 1040 or 1040-SR.
Health Care Coverage Shared Responsibility Payment
For 2019 you no longer need to make a shared responsibility payment or file Form 8965 if you don't have minimum essential health care coverage during the year. The "Full-year health care coverage or exempt" box has been removed from Form 1040. Note that you may still need to make a payment with your state tax return, if you live in a state that requires you to have health coverage and you don't have coverage or an exemption.
Standard Deduction Amounts Increased
The new standard deduction amounts are:
- Single or Married filing separately: $12,200
- Married filing jointly or Qualifying widow(er): $24,400
- Head of household: $18,350
Qualified Business Income Deduction
The simplified worksheet for figuring your qualified business income deduction is now Form 8995 Qualified Business Income Deduction Simplified Computation. If you don't meet the requirements to file Form 8995, use Form 8995-A Qualified Business Income Deduction.
Alternative Minimum Tax (AMT)
The AMT exemption amount has increased to $71,700 ($111,700 if married filing jointly or qualifying widow(er); $55,850 if married filing separately). The income levels at which the AMT exemption begins to phase out have increased to $510,300 ($1,020,600 if married filing jointly or qualifying widow(er)).
Virtual Currency
If you engaged in a transaction involving virtual currency during 2019, you need to file Schedule 1 and check the box at the top. You also need to report income received in a virtual currency as you would report income of a "non-virtual" or "real" currency (i.e. wages on Line 1 of Form 1040 or 1040-SR, self-employment compensation on Schedule C, disposition of virtual currency held for sale on Schedule C, capital gains or losses on Form 8949 and Schedule D, etc.).
Email Address
An optional field for an email address has been added to Forms 1040 and 1040-SR.
Extended Tax Provisions
Recent legislation extended certain tax benefits that expired at the end of 2017:
- Tuition and fees deduction
- Deduction for mortgage insurance premiums
- Nonbusiness energy property credit
- Alternative fuel vehicle refueling credit
- Indian employment credit
You can claim one or more of these benefits on your 2019 return, if eligible. If eligible for any of these benefits during 2018, you can file an amended return (1040-X) to claim them.
Disaster Tax Relief
Disaster tax relief was enacted for those impacted by certain federally declared disasters, including:
- An increased standard deduction based on your qualified disaster losses
- Election to use your 2018 earned income to figure your 2019 earned income credit
- Election to use your 2018 earned income to figure your 2019 additional child tax credit