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2019 Tax Brackets
Updates to Tax Brackets for Federal Tax Return:
| Ordinary Income Tax Bracket | Taxable Income* -Single | Taxable Income* – MFJ, Widower | Head of Household |
| 0% | <=9,700 | <=19,400 | <=13,850 |
| 12% | >9,700 and <=39,475 | >19,400 and <=78,950 | >13,850 and <=52,850 |
| 22% | >39,475 and <=84,200 | >78,950 and <=168,400 | >52,850 and <=84,200 |
| 24% | >84,200 and <=160,725 | >168,400 and <=321,450 | >84,200 and <=160,700 |
| 32% | > 160,725 and <=204,100 | > 321,450 and <=408,200 | >160,700 and <=204,100 |
| 35% | >204,100 and <=510,300 | >408,200 and <=612,350 | >204,100 and <=510,300 |
| 37% | >510,300 | > 612,350 | >510,300 |
Other Important Changes:
- Standard Deduction for single $12,200 and HOH $18,350, and $24,400 for MFJ.
- Additional Standard deduction for the age and blind is $1,250. you get $2,500 if both spouses are >=65.
- Alternative Minimum Tax (AMT) exemption amount for singles $71,700, MFJ increased to $111,700. In 2019, the 28 percent AMT rate applies to excess AMTI of $194,800 for all taxpayers ($97,400 for married couples filing separate returns). AMT exemptions phase out at 25 cents per dollar earned once taxpayer AMTI hits a certain threshold. In 2019, the exemption will start phasing out at $510,300 in AMTI for single filers and $1,020,600 for married taxpayers filing jointly
- Qualified Business Income Deduction (Sec. 199A) The Tax Cuts and Jobs Act includes a 20% deduction for pass-through businesses (K-1 receivers) against up to $160,700 of qualified business income for singles, and $321,400 for MFJ.
*For people who are not familiar with taxes, Taxable Income here isn’t your annual salary and other sourced income. It is after your deduction and exemption that arrived at your taxable income.
Capital Gains Brackets
| CG | Taxable Income* -Single | Taxable Income* – MFJ, Widower | Head of Household |
| 0% | <=39,375 | <=78,750 | <=52,750 |
| 15% | >39,375 and <=434,550 | >78,750 and <=488,850 | >52,750 and <=461,700 |
| 20% | >434,550 | >488,850 | >461,700 |
Your income tax when working abroad
Retiring abroad can have some terrific benefits that include a lower cost of living, better weather, and exotic cultures and scenery. But what if you’re still working? Is there any benefit to working abroad? There certainly can be if you meet certain qualifications. In the following paragraphs, I will show you what Foreign Earned Income Exclusion, Foreign Tax Credit (or Deduction) and Foreign Housing Deduction/Exclusion are, what forms needed and how to choose among these tax benefits.
Foreign earned income exclusion (FEIE)
U.S. citizens are taxed on income they earn anywhere in the world. However, if you meet two qualifications, you can take a tax exclusion on your income tax return for the income you earn abroad. As of 2016, this exclusion can be as much as $101,500.
This exclusion is per person, so if a married couple are both working abroad, each one can claim the full exclusion.
5 Saving Tips
Set up a goal and stick to plan is very important in accumulating wealth. You might have heard a
phrase ‘ if you don’t see it, you won’t spend it’, yes it relates to paycheck that comes in every month. One of the easiest and proven method to save is to set up your payroll to distribute fund
to your various saving vehicles so that by the time it reaches your checking out, it is the money you can spend on rent/mortgage payment, food, and other discretionary
items.
All About Roth
Roth IRA is my favorite type of retirement plan.
Roth IRA was established by the Taxpayer Relief Act of 1997, and in my opinion, one of the greast offers that the government provides for tax payers. Your contribution is after-tax, and your earnings are tax-free at distribution. Everyone should have a portion of their retirement in Roth IRA in my opinion. The tax-free distribution gives retiree flexibility in tax planning as it provides an additional source of retirement funding.
Is My Social Security Income Taxable?
Most people think their social security income is tax free. This is true for some people. However if you have substantial amount of income from other sources to support your retirment needs, then your social secruity income may become taxable. Therefore, planning ahead is definitely recommended.
Tax calculation is based on your "Total Income" as calculated below: Total Income = Your Adjusted Gross Income* + Non-taxable Interest + Half of your Social Security Income Adjusted Gross Income AGI = All your taxable incomes - allowable adjustments (generally speaking, personal exemptions and itemize/standard deduction)