How Will the New Tax Brackets Affect Your 2019 Tax Return?

Each November, the Internal Revenue Service publishes a list of updated figures and inflation adjustments, scheduled to take effect at the beginning of the next year. Part of that is the federal income tax brackets. Congress establishes the tax brackets, and then the IRS adjusts the income tax brackets to keep up with inflation.  

The Tax Cuts and Jobs Act generally lowered U.S. tax rates, with the minimum tax rate staying at 10% for the lowest-earning Americans. There are still seven federal tax brackets. For 2019, those categories are: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. How much a person pays in federal taxes when they file in 2020 depends on his or her income and filing status. Here are the inflation-adjusted 2019 tax brackets:

Marginal Tax Rate Single Married Filing Jointly Head of Household Married Filing Separately
10% $0-$9,700 $0-$19,400 $0-$13,850 $0-$9,700
12% $9,701-$39,475 $19,401-$78,950 $13,851-$52,850 $9,701-$39,475
22% $39,476-$84,200 $78,951-$168,400 $52,851-$84,200 $39,476-$84,200
24% $84,201-$160,725 $168,401-$321,450 $84,201-$160,700 $84,201-$160,725
32% $160,726-$204,100 $321,451-$408,200 $160,701-$204,100 $160,726-$204,100
35% $204,101-$510,300 $408,201-$612,350 $204,101-$510,300 $204,101-$306,175
37% More than $510,300 More than  $612,350 More than $510,300 More than $306,175


How the Income Tax Brackets Work

The U.S. has a progressive income tax system, meaning that your income can fall into more than one tax bracket and can be subject to more than one tax rate. People with lower taxable incomes are subject to lower federal income tax rates, and those who make more money pay higher federal income taxes.

The government decides how much tax a person owes by dividing their income into tax brackets, and each bracket gets taxed at the corresponding rate. That means that you will likely pay different tax rates on your entire income. Say, for example, you are a single person who made $50,000 in taxable income in 2019, which falls in the 22% bracket. You would pay 10% on the first $9,700, 12% on the income between $9,701 and $39,475, and then 22% on the rest of the income. The total would be about $6,900. 

The 2019 Standard Deduction Rate

There are two common ways of reducing your income tax bill. The first is tax credits, which directly reduce the amount of tax you owe. The second is lowering your income tax bracket with tax deductions. Tax deductions reduce how much of your income is subject to taxes, and generally speaking, a reduction in your taxable income could bring you down into a lower tax bracket and lower tax rate. 

Each year, taxpayers can choose between taking the standard deduction or itemized deduction, whichever is more beneficial to them. Itemizing means that you add up all of your applicable tax deductions, and then subtract that from your adjusted gross income. The standard deductions increase slightly every year, to keep up with inflation. The Tax Cuts and Jobs Act, however, nearly doubled the standard deduction from previous levels, leading many U.S. households to just use the standard deduction when calculating their taxes. The 2019 Standard Deduction is as follows:

  • Single: $12,200
  • Married Filing Jointly: $24,400
  • Head of Household: $18,350
  • Married, Filing Separately: $12,200

Contact Wiggam Law: Atlanta Tax Attorneys

If you are facing tax debts, whether it was your fault or someone else’s, please contact Wiggam Law for help with your case. We’ve worked with individuals, businesses, officers, directors, shareholders, and partners in matters before the Internal Revenue Service, the Georgia Department of Revenue, and other state tax departments. Our experienced Atlanta tax attorneys can help you choose the right strategy to resolve your tax issue and help reduce your criminal exposure. You can reach us by phone at (404) 233-9800 or send us a message through our website.

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