Standard deduction or Itemize

The standard deduction was significantly increased to $24,000 for  2018 joint tax returns making many taxpayers decide to no longer itemize and track such deductible expenses as charitable contributions, mortgage interest and property taxes. For Georgia, you have to follow whatever you did on the federal return which caused an interesting situation where it is better to itemize overall even if it isn't better on the federal return. The break-even point on a joint return is about $20,000 in itemized deductions. If you have over $20,000 in itemized deductions, it is usually better to itemize.

Qualified Business Income Deduction for Rental Properties

You can get a 20% deduction on rental property net income if it qualifies as a trade or business. In order to be a trade or business you have to establish that the rental is a regular, continuous, and considerable activity. One very specific thing that you can do is send 1099's to those non corporate service providers that you have paid over $600 in a calendar year. This shows that you are treating the rental like a business.

Tax Inflation Adjustments for 2020

The IRS has just announced the tax year 2020 annual inflation adjustments. Some of the more important adjustments and non-adjustments include the following:
1. An increase in the standard deduction for joint returns to $24,800 and to single returns to $12,400.
2. The basic exclusion for estates is going to $11,580,000.
3. The annual exclusion for gifts is still $15,000.
4. The contribution limit for 401(k) plans is increased to $19,500 and the catch up limit for those aged 50 and above is increased to $6,500.
5. The IRA contribution limit remains unchanged at $6,000 and the catch up contribution for 50 and over remains at $1,000.

Changes to Schedule 1 form 1040 for 2019

Schedule 1 is the form where you include additional income and adjustments to income. The IRS draft form dated as of 10/10/19 has two changes for 2019. There is a question asking if you bought or sold cryptocurrencies at any time during 2019. There is also a line where you are asked to put the date of your divorce agreement if you are paying or receiving alimony. The date is important because if your divorce agreement is after 2018, then the alimony is neither taxable to the recipient or deductible by the payer.