Provided from our own Norm Lewis, CPA
Lewis & Company
33562 Sea Point Drive
Dana Point, CA 92629
Cell 818 693 0909
Office 818 922 8299
NormLewis123@yahoo.com
Welcome to your Norm's blog. Norm continually shares updates about business, trends, news, and more.
Testimonial from one of Nelson's clients:
“Norm is an excellent tax preparer who has extensive knowledge of the tax code. His business experience makes him a great resource for structuring your new business in the most tax-efficient way. You will want Norm to represent you if you have a tax dispute with the IRS. Importantly, you will find Norm easy to work with.”
Below are the tax rates for 2019:
Married Individuals Filing Separate Returns
Taxable Income 2019 Tax
Not over $9,700 10% of the taxable income
Over $9,700 but not over $39,475 $970 plus 12% of excess over $9,700
Over $39,475 but not over $84,200 $4,543 plus 22% of the excess over $39,475
Over $84,200 but not over $160,725 $14,382.50 plus 24% of the excess over $84,200
Over $160,725 but not over $204,100 $32,748.50 plus 32% of the excess over $160,725
Over $204,100 not over $306,175 $46,628.50 plus 35% of the excess over $204,100
Over $306,175 $82,354.75 plus 37% of the excess over $306,175
Unmarried Individuals (other than surviving spouses and heads of households)
Taxable Income 2019 Tax
Not over $9,700 10% of the taxable income
Over $9,700 but not over $39,475 $970 plus 12% of excess over $9,700
Over $39,475 but not over $84,200 $4,543 plus 22% of the excess over $39,475
Over $84,200 but not over $160,725 $14,382.50 plus 24% of the excess over $84,200
Over $160,725 but not over $204,100 $32,748.50 plus 32% of the excess over $160,725
Over $204,100 not over $510,300 $46,628.50 plus 35% of the excess over $204,100
Over $510,300 $153,798.50 plus 37% of the excess over $510,300
Married Individuals Filing Joint Returns, & Surviving Spouses
Taxable Income 2019 Tax
Not over $19,400 10% of the taxable income
Over $19,400 but not over $78,950 $1,940 plus 12% of excess over $19,400
Over $78,950 but not over $168,400 $9,086 plus 22% of the excess over $78,950
Over $168,400 but not over $321,450 $28,765 plus 24% of the excess over $168,400
Over $321,450 but not over $408,200 $65,497 plus 32% of the excess over $321,450
Over $408,200 but not over $612,350 $93,257 plus 35% of the excess over $408,200
Over $612,350 $164,709.50 plus 37% of the excess over $612,350
Heads of Households
Taxable Income 2019 Tax
Not over $13,850 10% of the taxable income
Over $13,850 but not over $52,850 $1,385 plus 12% of excess over $13,850
Over $52,850 but not over $84,200 $6,065 plus 22% of the excess over $52,850
Over $84,200 but not over $160,700 $12,962 plus 24% of the excess over $84,200
Over $160,700 but not over $204,100 $31,322 plus 32% of the excess over $160,700
Over $204,100 not over $510,300 $45,108 plus 35% of the excess over $204,100
Over $510,300 $152,380 plus 37% of the excess over $510,300
2019 C Corporation Tax Rates
Taxable Income 2019 Tax
Any Amount of Income 21%
2019 Estates & Trusts Tax Rates
Taxable Income 2019 Tax
Not over $2,600 10% of the taxable income
Over $2,600 but not over $9,300 $260 plus 24% of the excess over $2,600
Over $9,300 but not over $12,750 $1,868 plus 35% of the excess over $9,300
Over $12,750 $3,075.50 plus 37% of the excess over $12,750
Social Security & Medicare
Self – Employed People Employees
SS Tax Rate: 12.4% 6.2%
Max Wages Subject to SS: $143,909* $132,900
Med. Tax Rate: 2.9% 1.45%
Additional Medicare Tax of 0.9%: Married Filing Joint – MAGI > $250,000
Married Filing Separate – > $125,000
Others – > $200,00
*The reason for the higher number is that only 92.35% of your net profits are taxed at 12.4%, and the $132,900 threshold is after application of the 92.35%, i.e., $143,909 x 92.35% = $132,900.
2019 Capital Gain Rates
Capital Asset Holding Period Tax Rate
Short-term capital gains. One year or less. Ordinary income tax rates, up to 37%.
Long-term capital gains. More than one year. Taxpayers with income below the 15% rate
threshold below, pay 0%.
The following are the income thresholds for 15% and 20% rates.
Married Filing Jointly: 15% Rate - $78,751 - $488,850 20% Rate – over $488,850
Married Filing Separately: 15% Rate - $39,376 - $244,425 20% Rate – over $244,425
Head of Household: 15% Rate - $52,751 - $461,700 20% Rate – over $461,700
Unmarried Individuals: 15% Rate - $39,376 - $434,550 20% Rate – over $434,550
Collectibles: More than one year. 28%.
Section 1202 qualified smal business stock. More than five years. 28%.
Unrecaptured §1250 Gain, (gains on real property attributable to straight-line depreciation).
More than one year. 25%.
Personal Deductions
2019 Standard Deduction by Filing Status
Unmarried Individuals $12,200
Married Individuals Filing Separate Returns $12,200
Heads of Households $18,350
Married Individuals Filing Joint Returns & Surviving Spouses $24,400
Dependents $12,200
Additional Standard Deduction Amount for Aged & Blind
Married Filing Jointly - $1,300
Single or Head of Household - $1,650
2019 Personal Exemptions
Per Individual No Longer Applicable through 2025
DEPRECIATION LIMITS FOR PASSENGER VEHICLES PLACED IN SERVICE IN 2018
*Note that the 2019 limits will be released in April 2019
With Bonus Depreciation No Bonus Depreciation
Tax Year Amount Amount
1st Tax Year $18,000 $10,000
2nd Tax Year $16,000 $16,000
3rd Tax Year $9,600 $9,600
Each Succeeding Year $5,760 $5,760
Retirement Plans 2019
IRA contribution (under age 50) $6,000
IRA contribution (50 and older) $7,000
IRA deductibility phase-out (based on MAGI=Modified Adjusted Gross Income)
Participants in employer plans
Single or Head of Household $64,000 - $74,000
Married, filing jointly $103,000 - $123,000
Married, filing separately $0 – $10,000
Nonparticipants in employer plans
Nonparticipant married to a participant $193,000 - $203,000
Neither spouse a participant Fully deductible
Phase out of Roth IRA contribution eligibility
Single $122,000 - $137,000
Married, filing jointly $193,000 - $203,000
Retirement Plan Max Employee Contribution Max Employer Contribution
SEP N/A 25% of wages or 20% of net self- employment income, max of $56,000
SIMPLE IRA $13,000* N/A
401(k) $19,000** 25% of wages***
*$19,000 if 50 or older
**$25,000 if 50 or older
***Combined maximum of employee and employer contributions is $56,000 in 2019