Tax Changes: Educating Employees on What to Expect in 2019


At the end of 2017, President Donald Trump signed a new tax plan into law, which probably affected the majority of your employees. Most of the changes in the new tax plan went into effect at the start of 2018, meaning they weren’t reflected on taxes filed by April 2018.

With 2018 more than halfway over, it’s important that your employees are informed on the tax changes that have taken place and how they might affect their tax filing in 2019.

Tax Changes

Federal Income Tax Rates

With the new tax plan, there are still seven different tax brackets, but tax rates were lowered. These changes have probably already been reflected in your employees’ tax withholding on their paychecks.Federal income tax rates are the percentage of your employees’ income they’re legally responsible for paying the federal government.The new tax rates can be found below.


Standard Deduction

The standard deduction for your employees will almost double. For taxpayers filing as single, the deduction increases from $6,350 to $12,000.

For married taxpayers filing jointly, the standard deduction rises from $12,700 to $24,000.

The standard deduction is the dollar amount that reduces the amount of income your employees are taxed. For example, if an employee is single and made $90,000, their standard deduction would reduce their taxable income to $78,000, moving them to a lower tax bracket.

State and Local Tax Deductions

Before the new tax law went into effect, deductions for state and local taxes (aka SALT deductions) were unlimited. That’s no more, as SALT deductions will now be capped at $10,000. Areas with high property taxes (like New York, California, and Southern Florida) will likely take the biggest hit with this change.

Healthcare Tax

The new tax plan eliminates the tax for not having health insurance at least nine months out of the year. The tax was 2.5% of adjusted gross income, but that tax has been completely eliminated.

You can read the 1,097 page document in full here
, but the items addressed above are some of the most important that your employees should know.

If you need to talk with a tax and payroll expert about how these changes will affect your employees, contact us today.

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