Nonprofit Resources
Key Federal Tax Figures for 2019
There are several points of interest that emerge from a review of the 2019 Key Federal Tax Figures summary. Here is a brief digest of items of note.
Increase in Standard Deduction
As noted in last year’s update, the tax reform legislation enacted in December 2017 nearly doubled the standard deduction. For 2019, the new higher amounts have increased again by an inflation adjustment. For a married couple filing a joint return, the increase is $400 to $24,400. Similar increases occurred for heads of household, single individuals, and married couples filing separate returns.
Automobile Mileage Rates
The tax-free mileage rate for business use of a vehicle increased to 58 cents per mile from 54.5 cents per mile, an increase of 3.5 cents per mile. Similarly, the tax deductible mileage rate for medical mileage increased to 20 cents per mile from 18 cents per mile while the mileage rate for charitable mileage remained unchanged at 14 cents per mile. Note that with the suspension of the moving expense deduction, there is no mileage reimbursement rate for moving mileage.
Other Inflation Adjustments for 2019
Inflation adjustments affect many areas, but not everything. Examine the specific issues that affect your organization carefully. Some examples:
| In 2018 and Returns for 2018 | In 2019 and Returns for 2019 |
|
|---|---|---|
| Foreign earned income exclusion | $103,900 | $105,900 |
| OASDI maximum wage base | $128,400 | $132,900 |
| Maximum annual contribution to defined contribution plan | $55,000 | $56,000 |
| Maximum salary deduction for 401(k)/403(b) | $18,500 | $19,000 |
| 401(k)/403(b) “catch-up” limit | $6,000 | $6,000 |
| IRA contribution limit | $5,500 | $6,000 |
| IRA over 50 “catch-up” limit | $1,000 | $1,000 |
| Highly compensated employee limit | $120,000 | $125,000 |
| Annual gift tax exclusion amount | $15,000 | $15,000 |
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