Interesting fact: many tax provisions are indexed for inflation.
Okay, I may have a loose definition of “interesting.” But the fact is still true. And inflation indexing is actually a really important thing when it comes to taxes.
The Internal Revenue Service (IRS) recently made several announcements regarding the 2019 tax year, including the updated estate and gift tax exemption.
Also included in the announcements were annual inflation adjustments for over 60 tax code provisions for 2019: tax rate schedules, standard deductions, cost-of-living adjustments, and more.
In the spirit of Christmas, I thought I would explain what these inflation announcements are and what they mean to you. After all, nothing says “Merry Christmas” like taxes.
Important note: Keep in mind that the numbers discussed in this post are for the tax year beginning January 1, 2019. These are not the numbers you will use to prepare your 2018 tax returns which will be filed in April 2019 (you can find that information here). This is the information you will need for your 2019 tax returns in 2020.**