More Surprises: A Peek at Upcoming Tax Changes
It’s a safe bet that few people look forward to filling out their individual or business tax returns — except, maybe, CPAs and other tax prep professionals who get paid to perform the chores. So many people breathed a sigh of relief thinking that there wouldn’t be any major changes in their 2019 return since the last big shakeup was the Tax Cuts and Jobs Act of 2017. Surprise, surprise. It turns out that some of the TCJA provisions didn’t kick in until now — and in some cases, even at this late date, final guidelines haven’t been issued.
One of the changes will probably bring a smile to some individuals, particularly millennials and others who were bummed out by a 2010 Affordable Care Act requirement to purchase health insurance. Formally known as the Individual Shared Responsibility Payment but usually referred to as the individual mandate penalty, it generally penalized people who didn’t buy health insurance.
There were exceptions, but adults who were snared by it could have been subject to a maximum penalty — which was due with their federal return — of either 2.5 percent of their annual income, or $695 per person, whichever was higher.
That’s been eliminated for 2019 federal filings, said John Blake, a partner at Klatzkin and chair of the tax committee at the accounting, audit, tax and consulting firm. Still, some states — including New Jersey — impose their own mandate, along with a noncompliance penalty of up to 2.5 percent of a household’s income, or a $2,085 per person, whichever is higher.