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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:

  1. 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.
  2. 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.
  3. 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. 
  4. 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.
  5. 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and while this seems quite specific, the parking provision passed within the 2018 Tax Cuts and Jobs Act has been repealed for non-profit businesses only.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.