Congress’ approval in December 2017 of the Tax Cuts and Jobs Act (TCJA) produced some of the most significant changes
to the nation’s tax system in decades by reducing individual rates for taxpayers at several income levels, increasing standard
deductions, and cutting the corporate tax rate. These changes affected income earned in 2018 and tax returns filed in early
2019; they also apply to 2019 income and taxes due in April 2020.
In addition, the U.S. Internal Revenue Service has made annual inflation adjustments for 2019 income affecting contribution
limits relating to savings for education and retirement. These adjustments reflect a recent change in how the IRS calculates
inflation and makes resulting adjustments to income thresholds, deduction amounts, and tax credit values. Prior to the TCJA,
the IRS used the Consumer Price Index to calculate inflation; it now uses the Chained Consumer Price Index, a measure
designed to provide a closer approximation to a cost-of-living index than the Consumer Price Index.
The front page of this flyer provides specifics on the latest details on taxes; additional details are highlighted below. For
more information, please visit irs.gov.