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The Arizona Department of Revenue has made some adjustments to state income tax requirements. These changes will affect your 2019 returns that you file in 2020. At Robert’s Tax & Retirement Planning it’s our job to stay ahead of the ever changing tax law. Feel free to contact us with questions beyond the scope of this article. Here is a breakdown the new AZ income tax laws:

For Tax Year 2019

  • Arizona is going to match the federal standard deduction for state income tax.  That’s $12,200 for single people or those who are married filing separately, $24,400 for married individuals who file jointly, and $18,350 for folks filing as head of household.
  • You’ll get a $100 tax credit for children under 17, and $25 for other dependents.
  • Charitable donations will be applied differently.
  • AZ is adjusting tax brackets, and lowering income taxes.

Will I Pay More Taxes or Less?

     It depends on what you earn, how you file, the number of dependents you have and other details. But if we take it at face value most people will expect to pay a little less state income tax. For example, single folks that earned $10,602 – $26,500 previously paid 2.88% income tax. Now they have been lumped into the lower tax bracket and will only pay 2.59%

The next tax bracket, those who earn $26,501 – $53,000 will notice a tiny decrease from 3.36% to 3.34%. So if you made exactly $50,000 in 2018 you would have owed $1,680 before any deductions. That same $50,000 earned in 2019 will cost you $1,670 in taxes. Not a huge difference, but every dollar counts!

People who earn more will also see a more significant decrease in the amount they’re taxed. We’re still talking about a tiny half a percent, but when you’re earning hundreds of thousands it will make a big difference.

Taxes and retirement planning are our specialties. If you’re going to need help filing your 2019 taxes give us a call! We know that changes happen in life: people get married, divorced, widowed… they have babies and launch businesses… At Robert’s Tax & Retirement Planning we are here for all of your big changes.

Read all about the 2019 changes at the AZ Department of Revenue.