June 30, 2019

Reminder-Discuss tax planning with your lawyer.

As a reminder there are changes to the federal income tax law effective for 2019 which affect married couples and divorced persons as well.  Here are some of them.


The 2019 standard deductions go up a bit.

  • Married couples get $24,400 plus $1,300 for each spouse age 65 of older.
  • Singles claim $12,200…$13,850 if 65 or older.
  • Household heads get $18,350 plus $1,650 once they reach 65.


Alimony paid under post-2018 divorce agreements is not deductible and former spouses aren’t taxed on alimony they received under post-2018 agreements.  

The new tax rules don’t automatically change tax treatment of alimony for pre 2019 agreements.  But if you and your former spouse were divorced before 2019 and believe changing the deductibility of alimony would benefit you, contact your attorney to explore the possibility of modifying the divorce judgment.

Tax rates on long-term capital gains and qualified dividends do not change. But the income thresholds to qualify for the various tax rates go up for 2019.

  • 0% rate: for individual taxpayers with taxable incomes up to $39,375 on single returns, $78,750 for joint returns and $52,750 for head-of-household filers.
  • 20% rate: starts at $434,550 for singles, $461,700 for heads of household and $488,850 for couples filing jointly.
  • 15% rate: for filers with taxable incomes between 0% and 20% break points.
  • 8% surtax on net investment income kicks in for single people with modified AGI over $200,000…$250,000 for marrieds.

AMT exemptions climb for 2019. They increase to $111,700 for couples and $71,700 for both singles and heads of household. The phase-out zones for the exemptions start at higher income levels as well…above $1,020,600 for couples and $510,300 for single filers and household heads. Also, the 28% AMT tax rate kicks in a bit later in 2019…above $194,800 of alternate minimum taxable income.

The 3.8% surtax on net investment income hits income over $12,750 in 2019.

If you are divorcing, be sure to discuss and address income tax issues with your attorney.  Thoughtful tax planning as part of your divorce can sometimes result in significant tax savings.  For example, simply postponing the final divorce judgment date to January of the following year may save you money.

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