305-586-2183 info@rushmoregroup.tax

Preparing for tax day

Use these tips to help you prepare for your appointment

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Required documents to keep on file:

  • Copies of Drivers License or State IDs
  • Social Security Cards
  • Proof of Residence for dependents claiming EIC

Income documents:

  • Income from jobs: forms W-2 for you and your spouse
  • Investment income—various forms 1099 (-INT, -DIV, -B, etc.), K-1s, stock option information
  • Income from state and local income tax refunds and/or unemployment: forms 1099-G
  • Taxable alimony received
  • Business or farming income—profit/loss statement, capital equipment information
  • If you use your home for business—home size, office size, home expenses, office expenses.
  • IRA/pension distributions—forms 1099-R, 8606
  • Rental property income/expense—profit/Loss statement, rental property suspended loss information
  • Social Security benefits—forms SSA-1099
  • Income from sales of property—original cost and cost of improvements, escrow closing statement, cancelled debt information (form 1099-C)
  • Prior year installment sale information—forms 6252, principal and Interest collected during the year, SSN and address of payer
  • Other miscellaneous income—jury duty, gambling winnings, Medical Savings Account (MSA), scholarships, etc.
(Use our handy IRS document search tool for your documents)
How can I check on my tax refunds? Tax Related Web-sites/phone numbers: IRS www.irs.gov IRS Get Refund Status IRS Inquiry Phone: (800) 829-1040
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Other tax documents:

  • IRA contributions
  • Energy credits
  • Student loan interest
  • Medical Savings Account (MSA) contributions
  • Moving expenses (for tax years prior to 2018 only)
  • Self-employed health insurance payments
  • Keogh, SEP, SIMPLE and other self-employed pension plans
  • Alimony paid that is tax dedcutible
  • Educator expenses
  • State and local income taxes paid
  • Real estate taxes paid
  • Personal property taxes—vehicle license fee based on value
  • Estimated tax payment made during the year, prior year refund applied to current year, and any amount paid with an extension to file.
  • Direct deposit information—routing and account numbers
  • Foreign bank account information—location, name of bank, account number, peak value of account during the year

Tax deduction documents:

  • Advance Child Tax Credit payment
  • Child care costs—provider’s name, address, tax id, and amount paid
  • Education costs—forms 1098-T, education expenses
  • Adoption costs—SSN of child, legal, medical, and transportation costs
  • Home mortgage interest and points you paid—Forms 1098
  • Investment interest expense
  • Charitable donations—cash amounts and value of donated property, miles driven, and out-of-pocket expenses
  • Casualty and theft losses—amount of damage, insurance reimbursements
  • Other miscellaneous tax deductions—union dues, unreimbursed employee expenses (uniforms, supplies, seminars, continuing education, publications, travel, etc.)  (for tax years prior to 2018 only)
  • Medical and dental expenses

Current Tax rates

Current rates information provided by Tax Foundation

2020 Tax Brackets

Income Tax Brackets and Rates

For 2020, income limits for all tax brackets as well as all filers will be adjusted for inflation and will be as follows.... The top marginal income tax rate of 37 percent will hit taxpayers with taxable income of $518,400 and higher for single filers and $622,050 and higher for married couples filing jointly..(SEE Table 1)

As you review the brackets, the income ranges for each rate have been adjusted for inflation.

Table 1. Tax Brackets and Rates, 2020 (Source: IRS)

Rate
Single Individuals - Taxable Income Over
Married Individuals Filing Joint Returns - Taxable Income Over
Heads of Households - Taxable Income Over
10%
$0
$0
$0
12%
$9,875
$19,750
$14,100
22%
$40,125
$80,250
$53,700
24%
$85,525
$171,050
$85,500
32%
$163,300
$326,600
$163,300
35%
$207,350
$414,700
$207,350
37%
$518,400
$622,050
$518,400

Standard Deduction and Personal Exemption

Standard deductions for single filers has increased by $200; $400 for married couples filing jointly (SEE Table 2). The personal exemption for 2020 remains eliminated.

Table 2. 2020 Standard Deduction and Personal Exemption (Source: IRS)

Filing Status
Deduction Amount
Single
$12,400
Married Filing Jointly
$24,800
Head of Household
$18,650

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two. More information can be found at IRS.Gov (SEE Table 3).

Table 3. 2019 Alternative Minimum Tax Exemptions (Source:IRS)

Filing Status
Exemption Amount
Unmarried Individuals
$72,900
Married Filing Jointly
$113,400


In 2020, the 28 percent AMT rate applies to excess AMTI of $197,900 for all taxpayers ($98,950 for married couples filing separate returns).

AMT exemptions phase out at 25 cents per dollar earned once taxpayer AMTI hits a certain threshold. In 2020, the exemption will start phasing out at $518,400 in AMTI for single filers and $1,036,800 for married taxpayers filing jointly (SEE Table 4).

Table 4. 2019 Alternative Minimum Tax Exemption Phaseout Thresholds

Filing Status
Threshold
Unmarried Individuals
$518,400
Married Filing Jointly
$1,036,800

Earned Income Tax Credit

Maximum Earned Income Tax Credit in 2020 for single and joint filers is $538, if the filer has no children (SEE Table 5). The maximum credit is $3,584 for one child, $5,828 for two children, and $6,660 for three or more children. These are small increases compared to 2019.

Table 5. 2019 Earned Income Tax Credit Parameters

Filing Status
Single or Head of Household
No Children
One Child
Two Children
Three or More Children
 
Income at Max Credit
$7,030
$10,540
$14,800
$14,800
 
Maximum Credit
$538
$3,584
$5,920
$6,660
 
Phaseout Begins
$8,790
$19,330
$19,330
$19,330
 
Phaseout Ends (Credit Equals Zero)
$15,820
$41,756
$47,440
$50,954
 
Married Filing Jointly
 
 
 
 
 
Income at Max Credit
$7,030
$10,540
$14,800
$14,800
 
Maximum Credit
$538
$3,584
$5,920
$6,660
 
Phaseout Begins
$14,680
$25,220
$25,220
$25,220
 
Phaseout Ends (Credit Equals Zero)
$21,710
$47,646
$53,330
$56,844

Qualified Business Income Deduction

The Tax Cuts and Jobs Act includes a 20 percent deduction for pass-through businesses against up to $163,300 of qualified business income for single taxpayers and $326,600 for married taxpayers filing jointly (SEE Table 6).

Table 6. 2020 Qualified Business Income Deduction Thresholds (Source:IRS)

Filing Status
Threshold
Unmarried Individuals
$163,300
Married Filing Jointly
$326,600

2019 Tax Brackets

Income Tax Brackets and Rates

The Tax Cuts and Jobs Act’s tax-bracket changes went into effect for the 2018 tax year. There are no structural changes for 2019. Seven tax brackets exist, and then seven marginal tax rates — From 10% to 37%. These are also unchanged.

As you review the brackets, the income ranges for each rate have been adjusted for inflation.

Table 1. Tax Brackets and Rates, 2019

Rate
For Unmarried Individuals, Taxable Income Over
For Married Individuals Filing Joint Returns, Taxable Income Over
For Heads of Households, Taxable Income Over
10%
$0
$0
$0
12%
$9,700
$19,400
$13,850
22%
$39,475
$78,950
$52,850
24%
$84,200
$168,400
$84,200
32%
$160,725
$321,450
$160,700
35%
$204,100
$408,200
$204,100
37%
$510,300
$612,350
$510,300

Standard Deduction and Personal Exemption

The standard deduction for single filers will increase by $200 and by $400 for married couples filing jointly (Table 4).

Table 2. 2019 Standard Deduction and Personal Exemption

 

Filing Status
Deduction Amount
Single
$12,200
Married Filing Jointly
$24,400
Head of Household
$18,350

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two. The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, this exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent. The AMT exemption amount for 2019 is $71,700 for singles and $111,700 for married couples filing jointly (Table 3).

Table 3. 2019 Alternative Minimum Tax Exemptions

Filing Status
Exemption Amount
Unmarried Individuals
$71,700
Married Filing Jointly
$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 joint 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 (Table 4).

Table 4. 2019 Alternative Minimum Tax Exemption Phaseout Thresholds

 

Filing Status
Threshold
Unmarried Individuals
$510,300
Married Filing Jointly
$1,020,600

Earned Income Tax Credit

The maximum Earned Income Tax Credit in 2019 for single and joint filers is $529, if the filer has no children (Table 5). The maximum credit is $3,526 for one child, $5,828 for two children, and $6,557 for three or more children. All these are relatively small increases from 2018.

Table 5. 2019 Earned Income Tax Credit Parameters

Filing Status
Single or Head of Household
No Children
One Child
Two Children
Three or More Children
 
Income at Max Credit
$6,920
$10,370
$14,570
$14,570
 
Maximum Credit
$529
$3,526
$5,828
$6,557
 
Phaseout Begins
$8,650
$19,030
$19,030
$19,030
 
Phaseout Ends (Credit Equals Zero)
$15,570
$41,094
$46,703
$50,162
 
Married Filing Jointly
 
 
 
 
 
Income at Max Credit
$6,920
$10,370
$14,570
$14,570
 
Maximum Credit
$529
$3,526
$5,828
$6,557
 
Phaseout Begins
$14,450
$24,820
$24,820
$24,820
 
Phaseout Ends (Credit Equals Zero)
$21,370
$46,884
$52,493
$55,952

Qualified Business Income Deduction

The Tax Cuts and Jobs Act includes a 20 percent deduction for pass-through businesses against up to $160,700 of qualified business income for unmarried taxpayers and $321,400 for married taxpayers (Table 7).

Table 7. 2019 Qualified Business Income Deduction Thresholds

Filing Status
Threshold
Unmarried Individuals
$160,700
Married Filing Jointly
$321,400

Tax Records Retention

Tax record retention times