What Do the 2019 Cost-Of-Living Adjustments Mean for You?
The IRS has announced its 2019 cost-of-living adjustments to tax items that might affect you. Many of the amounts increased to account for inflation, but some remained at 2018 levels. As you implement 2018 year-end tax planning strategies, be sure to take these 2019 adjustments into account in your planning.
Bear in mind that, under the Tax Cuts and Jobs Act, annual inflation adjustments are now calculated using the chained consumer price index (also known as C-CPI-U). This increases tax bracket thresholds, the standard deduction, certain exemptions and other figures at a slower rate than was the case with the consumer price index previously used, potentially pushing taxpayers into higher tax brackets and making various breaks worth less over time. The law adopts the C-CPI-U on a permanent basis.
2019 cost-of-living adjustments and tax planning
With the 2019 cost-of-living adjustment amounts trending higher, you have an opportunity to realize some tax relief next year. In addition, with many retirement-plan-related limits also increasing, you have the chance to boost your retirement savings. If you have questions on the best tax-saving strategies to implement based on the 2019 numbers, please give us a call. We’d be happy to help.