FYI: .The IRS has tweaked income tax brackets for the new year, adjusting them for inflation.
.Next year’s standard deduction will be $12,200 for singles and $24,400 for married couples who file jointly. Personal exemptions will remain at zero.
.There will be no penalty for failure to maintain minimum essential health coverage in 2019. This year, the penalty was $695.
Prepare your calculators. The Internal Revenue Service has updated its tax brackets for 2019.
This year marks the first under the new Tax Cuts and Jobs Act, an overhaul of the tax code that resulted in lower individual income tax rates, a doubled standard deduction and the elimination of personal exemptions.
For the new year, the IRS has bumped up the individual income tax brackets, adjusting them for inflation.
See below for your new bracket:
Regards,
Ted
https://www.cnbc.com/2018/11/16/here-are-your-new-income-tax-brackets-for-2019.html
Comments
Does this mean I don't need part d coverage ?
Derf
Filing Single with income of $39,475 / tax rate = 12%
Filing Single with income of $39,476 / tax rate = 22%
Married, filing jointly, with income of $78,950 / tax rate = 12%
Married, filing jointly, with income of $78,951 / tax rate = 22%
There has to be a better way to do this. Or does the IRS allow people to “refund” $1 of income back to their employer or mutual fund to avoid such a steep rate increase?
Appears that there remains graduations within the brackets as previous, not simple cut-off points for dollar amounts......take a peek at the U.S. Tax Center. NOTE: This is not the IRS.gov web site.
Rest easy.
Catch
Occurred to me later on that might be the case. Years ago, I did them late at night (usually April 14th) with pencil & pen under a never bright enough desk lamp. That process probably instilled more familiarity with the brackets & how they worked. In recent years it’s all been done with Turbo or H&R Block running on the laptop. Quick & easy. Guess I’ve lost touch with the process. Maybe there’s something to be said for the old days ...
All said, that’s still a remarkable leap in tax rates from being among the underprivileged to being considered middle / lower middle class.
In 2018 the minimum penalty for an adult not having coverage for the entire year was $695. One prorates for each month that you had coverage.
The actual penalty is the greater of $695 or 2.5% of household income. But there's a cap that's defined to be the national average premium for a bronze plan. The IRS documented that cap at $283/mo ($3396/year) for 2018.
There are different figures and rules for children and for families.
The individual mandate is still in place for 2019. What has changed (as it has every year) is the penalty for not having coverage. Starting in 2019, that penalty is $0.
Regarding Medicare, Medicare Part A (hospitalization) satisfies the mandate's requirement that you carry minimum essential coverage (MEC). One satisfies MEC in 2018 even without Part B (doctors), let alone Part D (drugs). If you have Medicare Advantage (Part C), you can satisfy the MEC with a plan MA advantage plan that doesn't cover drugs; you do not need to have an MAPD (Medicare Advantage including Part D) plan.
All that said, if you do not carry drug coverage when eligible under Medicare, you will be subject to a lifetime premium penalty should you choose to get coverage later.
Mandate rules: https://www.nolo.com/legal-encyclopedia/how-much-the-obamacare-individual-penalty-2014.html
IRS national average bronze plan premiums by year:
https://www.thetaxbook.com/updates/TheTaxBook/Updates/2018-08-30_National_Average_Premium_for_Bronze_Level_Coverage.pdf
Plans that satisfy MEC requirements (such as Medicare Part A):
https://www.healthcare.gov/fees/plans-that-count-as-coverage/
Part D late enrollment penalty:
https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/downloads/11222-P.pdf
Derf
Please review the Part D link @msf provided and do a broad search of the topic for related info. If one drops Part D coverage for a time period, and/or never began the coverage; one may start the plan again, but a permanent cost penalty will be put in place. This is Medicare policy, which will be passed along to you through whomever you use for such coverage.
I do know that IRMAA (high income) surcharges on Part D (drug) premiums are paid to Medicare and not to the private insurer. Since the Part D late enrollment penalty is based on the "base" part D rate (same as the IRMAA surcharge), I suspect that the penalty payment also goes to Medicare. But I don't know one way or the other.
To clarify what I originally wrote:
Medicare Part A - required by ACA, but the penalty in 2019 is $0 if you don't have Part A.
Medicare Part B - not required by ACA, but if you don't have it now and pick it up later, there's a penalty (increased premium)
Medicare Part D - not required by ACA, but if you don't have it now and pick it up later, there's a penalty (increased premium)
Medicare Part C (Medicare Advantage) - takes the place of parts A and B, usually (but not always) includes Part D (drug coverage) as well. Late enrollment penalties apply here as well.
I forwarded the same Part D link last week to a friend, with the same question.
I've done this a few times (Part D questions) over the years to others. Sadly, I'm asked these questions, when a simple search (by them) will provide the answers. Causes me to wonder too often how these folks function in other areas of their lives. My overview usually is readily available when I observe the lack of courtesies and driving habits on the roadways. Poor driver functions on public roads allow for a daily gauge of the quality of our society, excluding the very elderly and the new, young drivers.
The "lets go ask Mikey" syndrome has helped me learn in many areas. A side benefit, one may suppose.
Take care to you and yours,
Catch
@catch22: For further reference please see: MFO discussion 45377
Yes, I did see your note about the 40%. That number applies to many in Michigan who drive the really large pick-up trucks. Some days the 40% applies to all.
Best to both of you in your part of the country.......and don't breathe too much of that air, eh????? Well, no more than necessary.
Catch