The US Internal Revenue Service (IRS) has issued its finalised tax brackets for the 2019 season, after having adjusted existing rates to account for inflation.
The Trump administration passed the Tax Cuts and Jobs Act at the end of 2017, which enacted a number of reforms to the US tax code, including lowering income brackets for most people. The IRS adjusts tax rates in line with inflation each year, and these latest changes will generally apply to tax returns filed in 2020.
The rates for 2019 are:
- 10%: Individuals with incomes of US$9,700 or less/Married couples with US$19,400 or less;
- 12%: Individuals with incomes over US$9,700/Married couples with more than US$19,400;
- 22%: Individuals with incomes over US$39,475/Married couples with more than US$78,950;
- 24%: Individuals with incomes over US$84,200/Married couples with more than US$168,400;
- 32%: Individuals with incomes over US$160,725/Married couples with more than US$321,450;
- 35%: Individuals with incomes over US$204,100/Married couples with more than US$408,200;
- 37%: Individuals with incomes over US$510,300/Married couples with more than US$612,350.
The standard deduction for married couples will rise to US$24,400, while for individuals it will go up to US$12,200, an increase of US$400 and US$200, respectively, Fox Business reported.
The IRS has also released a memorandum outlining new procedures for making voluntary disclosures about tax non-compliance, which applies to both foreign and domestic taxpayers. A voluntary disclosure has to date enabled taxpayers with previously unreported, or underreported, income or assets to come clean in exchange for possible protection from criminal prosecution.
But under the new procedures, they could find themselves subject to a civil fraud penalty and maximum Foreign Bank Account Report (FBAR) penalties. Although taxpayers are entitled to appeal, the memo specifically indicates that requests for reduced penalties will be granted only in “exceptional” cases, according to JD Supra.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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The US Internal Revenue Service (IRS) has issued its finalised tax brackets for the 2019 season, after having adjusted existing rates to account for inflation.
The Trump administration passed the Tax Cuts and Jobs Act at the end of 2017, which enacted a number of reforms to the US tax code, including lowering income brackets for most people. The IRS adjusts tax rates in line with inflation each year, and these latest changes will generally apply to tax returns filed in 2020.
The rates for 2019 are:
- 10%: Individuals with incomes of US$9,700 or less/Married couples with US$19,400 or less;
- 12%: Individuals with incomes over US$9,700/Married couples with more than US$19,400;
- 22%: Individuals with incomes over US$39,475/Married couples with more than US$78,950;
- 24%: Individuals with incomes over US$84,200/Married couples with more than US$168,400;
- 32%: Individuals with incomes over US$160,725/Married couples with more than US$321,450;
- 35%: Individuals with incomes over US$204,100/Married couples with more than US$408,200;
- 37%: Individuals with incomes over US$510,300/Married couples with more than US$612,350.
The standard deduction for married couples will rise to US$24,400, while for individuals it will go up to US$12,200, an increase of US$400 and US$200, respectively, Fox Business reported.
The IRS has also released a memorandum outlining new procedures for making voluntary disclosures about tax non-compliance, which applies to both foreign and domestic taxpayers. A voluntary disclosure has to date enabled taxpayers with previously unreported, or underreported, income or assets to come clean in exchange for possible protection from criminal prosecution.
But under the new procedures, they could find themselves subject to a civil fraud penalty and maximum Foreign Bank Account Report (FBAR) penalties. Although taxpayers are entitled to appeal, the memo specifically indicates that requests for reduced penalties will be granted only in “exceptional” cases, according to JD Supra.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
OTHER STORIES THAT MAY INTEREST YOU
IRS uses technology to uncover $10bn in US tax fraud
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US employers fail to withhold enough tax from one in five citizens
