2019 Tax Bracket
Why does everyone seem to care so much about their 2019 tax bracket? As a taxpayer, you pay a percentage of your earnings to the IRS each year. The government uses this money to fund almost everything, from public schools to military defense. How much will you owe this year? Depending on your annual income, you may end up owing anywhere from 10% to 37% in taxes. Knowing your bracket will help you determine how much you should expect to pay this year. Here’s how it works.
Make More Money, Pay More in Taxes
A percentage of every dollar you earn goes to Uncle Sam. In order to stimulate the economy and help lower-income families, the government charges those who make more money the most in taxes. It’s that simple.
There are currently seven different brackets for 2019, and you may fall into one or more during the tax season. The lowest bracket has a 0% tax rate. For single individuals, the first $9,700 you make isn’t subject to taxes. The IRS will tax every dollar over that amount at the corresponding rate, up to 37% for the wealthiest files. A tax advisor can help you estimate how much you’ll owe in taxes this year.
Don’t Throw Away Those Receipts! Every Deduction Counts
Your taxable income is different than your total income. The IRS defines taxable income as your total earned and unearned income minus any deductions. What does this mean for you? If you play your cards correctly, claiming every deduction can theoretically knock you into a lower percentage bracket.
Work with a tax planner to learn which deductions you can take. Self-employed individuals can deduct a long list of itemized expenses. But, even those receiving a standard W-2 may be able to reduce their tax burden with specific deductions. Be aware, however. If you claim a deduction that doesn’t apply to your situation, you may end up paying more in fees and penalties if you receive an audit. Always keep an accurate paper trail to support any deductions you claim.
Claiming Dependents May Lower Your Tax Bill
The more people you claim as dependents, the more money you may keep in your pocket. The IRS recognizes both adult and child dependents. Related dependents must live at the same residence for more than half the year. On the other hand, un-related dependents must reside in your home for the entire year. Children must also be under the age of 19 or 24 and enrolled as a full-time student. When claiming someone as a dependent, make sure no one else does the same. Multiple people claiming the same individual creates a red flag, and you may find yourself receiving an audit from the IRS.
In addition to dependents, you may also save money by filing jointly instead of as a single individual. While married couples are not required to file together, filing separately almost always results in paying more. However, every tax situation is different, so you need to consult with an expert to determine how you should file this year.
Don’t Take Any Risks—Consult with a Tax Professional about Your 2019 Tax Bracket
There’s no room for error when you file your taxes. You must report every dollar you earn, and even a small mathematical mistake can cost you a lot in the end. The tax experts at Incompass Tax, Estate & Business Solutions will double-check every line before you file. No matter if you’re single, married, retired, or disabled, we understand the current tax code and want to help you make sense of it all. Connect with us online to learn about your 2019 tax bracket.