Page 14 - Supplement to Income Tax 2019

Estimating Your 2019 Taxes

AMT exemption amounts and breakpoint between 26% Per diem payments from long-term-care policies (page
and 28% rates (pages 484-486). The AMT exemption 417). Payments received from a qualified long-term-care
amounts for 2019 are increased to $111,700 for married insurance contract on a per diem or other periodic basis
couples filing jointly and surviving spouses, $71,700 for are tax free for 2019 up to $370 per day without regard to
singles and heads of households, and $55,850 for married actual expenses incurred.
persons filing separately. The 26% AMT rate applies to
the first $194,800 of 2019 taxable income (AMTI minus Foreign earned income and housing exclusions (pages
exemption), or $97,400 if married filing separately, and the 642–648). The maximum foreign earned income exclusion
28% rate applies to the excess over $194,800/$97,400. for 2019 is $105,900.
Based on a maximum earned income exclusion of
Adoption credit and employer adoption assistance (pages $105,900, the base foreign housing amount is $16,944 (16%
56, 65, 510–512). The maximum adoption credit for 2019 × $105,900) for the full year, or $46.42 per day if the foreign
is $14,080. The credit will phase out if MAGI exceeds residence or physical presence test is met for only part of the
$211,160, and the phaseout is complete if MAGI is year. The foreign housing exclusion is allowed to the extent
$251,160 or more. The same limit and phaseout rules apply that housing expenses, not to exceed the annual limit, exceed
to the employee exclusion for benefits under an employer’s the base amount. Based on a maximum earned income
adoption assistance program. exclusion of $105,900, the 2019 limit on housing expenses

Child tax credit (pages 499-501). The maximum credit will generally be $31,770 (30% × $105,900) for the full year,
amount is set by statute at $2,000 per qualifying child. For or $87.04 per qualifying day, but the IRS will announce a
2019, the maximum amount of the credit that is refundable higher housing expense limit for designated high-cost areas.
for 2019 is unchanged at $1,400 per qualifying child. The Earned income credit (pages 506–509). For 2019, the
gross income limit for a qualifying relative for the $500 maximum credit is $3,526 for one child, $5,828 for two
nonrefundable credit for other dependents is increased to children, $6,557 for three or more children, and $529 if
$4,200 (up from $4,150 in 2018). there are no children.

Health FSA salary reduction (pages 75-76). The 2019 For taxpayers with children, the 2019 credit will begin to
limit on salary-reduction contributions to a health flexible phase out if either earned income or AGI is at least $19,030
spending arrangement is $2,700. if single, head of household, or qualifying widow/widower,
or at least $24,820 if married filing jointly. Married persons
Educator expenses (page 337). The maximum above- filing separately may not claim the credit. For those with
the-line deduction for educator expenses remains at $250 no children, the phaseout begins at $8,650, or $14,450 if
for 2019. married filing jointly. For taxpayers with one child, the credit

Exclusion for interest on savings bonds used for tuition is completely phased out if either earned income or AGI is
(pages 601–603). The exclusion for interest on Series EE $41,094 or more, $46,884 if married filing jointly. For two
and I bonds redeemed to pay higher education expenses children, the credit is completely phased out if either earned
will start phasing out for married couples filing jointly with income or AGI is at least $46,703, $52,493 if married
2019 MAGI over $121,600, and the phaseout is complete filing jointly. For taxpayers with three or more children, the
if MAGI is $151,600 or more. For single taxpayers, credit is completely phased out if either earned income or
heads of households, and qualifying widows/widowers, AGI is at least $50,162, $55,952 if married filing jointly.
the phaseout begins when MAGI exceeds $81,100 and is For taxpayers with no children, the phaseout is complete at
complete at MAGI of $96,100 or more. Married persons income of $15,570, $21,370 if married filing jointly.
filing separately are not eligible for the exclusion. Student loan interest deduction (pages 613–615). The

Premiums for long-term-care policies (page 417). The maximum above-the-line deduction for student loan interest
maximum amount of long-term-care insurance premiums is set by statute at $2,500. For 2019, the $2,500 limit is
that can be included in the itemized deduction for medical phased out if modified adjusted gross income (MAGI) is
expenses depends on the policyholder’s age at the end of between $140,000 and $170,000 for married couples filing
the year. The 2019 limit is $420 for taxpayers age 40 or jointly, or between $70,000 and $85,000 if single, head of
younger, $790 for those over age 40 but not over 50, $1,580 household, or qualifying widow/widower. Married persons
for those over age 50 but not over 60, $4,220 for those over filing separately and individuals who meet the definition of
age 60 but not over 70, and $5,270 for those over age 70. a dependent are not eligible for the deduction.

10 | Supplement to J.K. Lasser’s Your Income Tax 2019