IRS Adjusts Tax Bracket Income Figures for 2019

In just over a week 2018 will come to an end, with 2019 following right behind it. As we await the new year, the Internal Revenue Service (IRS) has announced the tax brackets that will be in effect as when the calendar page flips. Following the Tax Cuts & Jobs Act that took hold this year, 2019 will once again see seven total tax brackets. However the limits of each have been adjusted due to inflation.

First off, since these tax brackets go into effect for 2019, they won’t really impact you until you’re filing your tax return in 2020. In other words, it’s the 2018 brackets seen below that you’ll be working with come April. Take a look at how next year’s brackets compare to the current ones:

Rate 2019 Individuals 2018 Individuals 2019 Married Filing Jointly 2018 Married Filing Jointly
10% Up to $9,700 Up to $9,525 Up to $19,400 Up to $19,050
12% $9,701 to $39,475 $9,526 to $38,700 $19,401 to $78,950 $19,051 to $77,400
22% $39,476 to $84,200 $38,701 to $82,500 $78,951 to $168,400 $77,400 to $165,000
24% $84,201 to $160,725 $82,501 to $157,500 $168,401 to $321,450 $165,001 to $315,000
32% $160,726 to $204,100 $157,501 to $200,000 $321,451 to $408,200 $315,000 to  $400,000
35% $204,101 to $510,300 $200,001 to $500,000 $408,201 to $612,350  $400,001 to $600,000
37% Over $510,300 Over $500,000 Over $612,350 Over $600,000

As you can see, the limits for each bracket have increased. Now the lowest bracket (10%) will be applied to incomes of $9,700 or less for individuals and incomes of $19,400 or less for married couples filing jointly. Meanwhile the top 37% rate will not apply until individuals top $510,300 in income or married couples filing jointly reach more than $612,350 in income. Those are up from $500,000 and $600,000 respectively.

Another change coming in 2019 is an increase to the standard deduction. This is deduction can be claimed by filers who wish not to itemize deductions and doubled as the result of the Tax Cuts & Jobs Act. While this year’s adjustments are small by comparison, the $200 increase for individuals and $400 increase for those who are married and filing jointly is still significant. This brings the new standard deductions up to $12,200 and $24,400.

One of the more interesting adjustments coming in 2019 actually has to do with health insurance. While 2018 rules still included a $695 penalty for not maintaining minimum essential health coverage, that penalty has been dropped to $0 for the upcoming year. Despite the elimination of this “individual mandate” (and judge’s recent ruling that, without it, the Affordable Care Act is unconstitutional), and state exchanges do continue to operate. That said, this year’s open enrollment period concluded on December 15th.

These are actually just a few of the adjustments that the IRS is making for 2019, but you can find many more on their site. It should also be noted that the IRS also recently announced increased contribution limits for 401(k)s, IRAs, and other retirement accounts. So while you may not be a tax expert or need to dive too deeply into all of these upcoming changes, it’s still a good idea to have a basic understanding of what’s to come in order to maximize your tax savings.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

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