The Standard Deduction’s Double Standard – April 2019
The 2019 “tax season,” during which most 2018 tax returns are prepared, will soon peak at the April 15 deadline. One key trend is that more people are taking the standard deduction, which has increased significantly, and fewer people are claiming itemized deductions, which have been restricted. These changes result from passage of the Tax Cuts and Jobs Act (TCJA) of 2017, which affects preparation of 2018 tax returns.
What’s Inside
- The standard deduction’s double standard
- Homeowner’s insurance protects a prime asset
- Roth solo 401(k) for (very) small businesses
- Tax calendar
Stock market volatility has some investors thinking about putting some money into bonds, which historically have offered relatively stable prices. One key decision facing bond market investors is whether to choose regular, taxable bonds or tax exempt municipal bonds. (This discussion concerns investments in taxable accounts because tax-exempt municipals and muni funds typically don’t belong in a tax-favored retirement account.)
As of writing, in late 2018, the U.S. stock market has been extremely volatile. By the time you read this article, in February 2019, stocks may have stabilized, may have risen, or may have dropped dramatically. The last stunning market retreat, which made tumultuous news in late 2008, reached its bottom in February 2009.
The start of each year might be considered “Double IRA” season. Until mid-April (the 15th, in 2019), you still can make contributions to an IRA for 2018, if you have funds you’d like to save for retirement. Most workers and their spouses may each contribute up to $5,500 or $6,500 for those who were 50 or older at the end of 2018.
The Tax Cuts and Jobs Act (TCJA) of 2017, sharply raised the standard deduction and placed limits on itemized deductions. In particular, no more than $10,000 can be deducted in state and local tax (SALT) payments on a single or joint tax return.