Preparing your 2020 tax return for 2019 tax year

Advice from Janet Berry-Johnson, CPA. 

Source: New York Times Wirecutter
https://thewirecutter.com/money/tax-filing-mistakes-2020/

File early

If you’re looking forward to getting money back this year, file your tax return as early as you can to ensure you receive that refund as soon as possible.

Consider filing electronically

The IRS recommends filing electronically whenever possible, calling e-filing “easy, safe, and the most accurate way to file taxes.”

Review your withholding

To change your withholding, you need to fill out a new Form W-4 (PDF) with your HR department. The form, which has been redesigned for 2020, lets you fine-tune the amount of tax withheld from your paycheck. Work with your CPA or tax adviser to crunch the numbers, or get help from the IRS withholding calculator.

2019 standard deductions are:

• $12,200 for single taxpayers
• $24,400 for married couples who file a joint return
• $12,200 for married couples who file separately
• $18,350 for head of household filers

If you’re age 65 and older (and/or blind), you can claim an additional standard deduction of $1,300 ($1,650 if you file as single or head of household). If both you and your spouse are 65 and older, that $1,300 becomes $2,600.

 
It is essential to understand that the tax brackets only kick in after the standard deduction (or itemized deductions)! For example, Married couples who are both over 65 can earn $27,000 free of federal income tax ($24,400 + $1300 each). Only then is additional income subject to tax, with the first increment ($19,400) taxed at 10%. It is critical to know your marginal tax rate! Use the table below to know your highest federal income tax rate.

Income tax brackets have been adjusted for inflation

For the 2019 tax year (January 1 to December 31, 2019), tax brackets have been slightly adjusted to account for inflation.
2019 income tax brackets

Marginal tax rates	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%	over $510,300	over $612,350	over $510,300	over $306,175

Data from The Tax Foundation