In light of the recent changes to the tax code, here are 10 year-end tax planning strategies that may help you reduce your income tax bill, minimize transfer taxes and facilitate transferring assets to heirs.
Consider your 2019 tax rates as you plan for 2020
To help you understand your tax obligations, we have provided the updated tax rates for 2019.
Click on your filing status below to get started.
Filing status1
Single Income2
Joint Income2
Your maximum federal income tax rate on wage income
32%
Your share of Medicare tax on wages
1.45%
Your maximum Social Security tax on wages
$8,537.003
Your maximum tax rate on long-term capital gains and dividend income
15%
Your maximum tax rate on unearned income – other than capital gains and dividends
32%
Your maximum federal income tax rate on wage income
32%2
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$8,537.003
Your maximum tax rate on long-term capital gains and dividend income
18.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
35.8%
Your maximum federal income tax rate on wage income
35%
Your share of Medicare tax on wages
2.35%3
Your maximum Social Security tax on wages
$8,537.003
Your maximum tax rate on long-term capital gains and dividend income
18.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
35.8%
Your maximum federal income tax rate on wage income
35%
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$8,537.003
Your maximum tax rate on long-term capital gains and dividend income
23.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
35.8%
Your maximum federal income tax rate on wage income
37%
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$8,537.003
Your maximum tax rate on long-term capital gains and dividend income
23.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
40.8%
Your maximum federal income tax rate on wage income
24%2
Your share of Medicare tax on wages
1.45%
Your maximum Social Security tax on wages
$17,075.003
Your maximum tax rate on long-term capital gains and dividend income
15%
Your maximum tax rate on unearned income – other than capital gains and dividends
24%
Your maximum federal income tax rate on wage income
24%
Your share of Medicare tax on wages
2.35%3
Your maximum Social Security tax on wages
$17,075.003
Your maximum tax rate on long-term capital gains and dividend income
18.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
27.8%
Your maximum federal income tax rate on wage income
32%
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$17,075.003
Your maximum tax rate on long-term capital gains and dividend income
18.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
35.8%
Your maximum federal income tax rate on wage income
35%
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$17,075.003
Your maximum tax rate on long-term capital gains and dividend income
18.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
38.8%
Your maximum federal income tax rate on wage income
35%
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$17,075.003
Your maximum tax rate on long-term capital gains and dividend income
23.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
38.8%
Your maximum federal income tax rate on wage income
37%
Your share of Medicare tax on wages
2.35%
Your maximum Social Security tax on wages
$17,075.003
Your maximum tax rate on long-term capital gains and dividend income
23.8%
Your maximum tax rate on unearned income – other than capital gains and dividends
40.8%
J.P. Morgan calculations, JCT, U.S. Social Security Administration, Tax cuts and Jobs Act of 2017, Rev. Proc 2019-44
11The income tax rate is imposed on taxable income of the amounts shown in this row; the long-term capital gains tax rate is also based on taxable income; the threshold for the 0.9% Medicare surtax is wage income; and the threshold for the 3.8% tax on net investment income is based on modified AGI. 2Note that employers will begin to withhold when an employee’s income reaches $200,000 even if the employee and his or her spouse would not reach the $250,000 threshhold; the additional tax collected can be claimed as a credit on the couple’s joint return. 3The OASDI tax is not imposed on wages above $137,700, although the tax is imposed on the wage income of each member of a couple, if applicable, so a couple could pay up to $17,075 on income of $275,400 if each of them made at least $137,700.
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