5 End-of-Year Tax Changes
At the end of 2019, a federal government spending bill passed on many positive changes. Here are the top five areas you’ll benefit:
- Healthcare: This bill repeals excise tax on some high cost employer health plans and medical devices. It also repeals the annual fee on health insurance providers.
- Retirement: In this category, the overarching goal is to encourage Americans to save for retirement, and to incentivize employers to create retirement plans. Two examples: if you are still working, you may contribute to IRAs past age 70; and the required minimum distribution age has been increased to age 72.
- Extenders: Many expired tax provisions have been extended, across multiple categories. The bill improves mortgage insurance premium and medical expense deductions, tuition expenditures, extends several incentives for energy efficiency and more.
- Disaster tax relief: Victims of various disasters in 2018 and 2019 can make tax-favored withdrawals from retirement plans. The bill also offers a credit for employers who pay wages while their business is not operating due to a natural disaster.
- Parking: and while this seems quite specific, the parking provision passed within the 2018 Tax Cuts and Jobs Act has been repealed for non-profit businesses only. This required some employers who paid for employee transportation or parking to pay unrelated income tax on that amount. It was an unfavored change, and as a result, many employees lost a valuable benefit.