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Business Tax

Official inflation-adjusted tax rate schedule and other tax figures for 2019

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

Rev Proc 2018-57, 2018-49 IRBIR 2018-222, 11/15/2018

IRS has issued official inflation-adjusted tax rate schedules and other key tax figures for 2019.

Tax rate schedules.  The tax rate schedules for 2019 will be as follows.

For married individuals filing joint returns and surviving spouses:
If taxable income is: The tax is:
Not over $19,400 10% of taxable income
Over $19,400 but not over $78,950 $1,940 plus 12% of the excess over $19,400
Over $78,950 but not over $168,400 $9,086 plus 22% of the excess over $78,950
Over $168,400 but not over $321,450 $28,765 plus 24% of the excess over $168,400
Over $321,450 but not over $408,200 $65,497 plus 32% of the excess over $321,450
Over $408,200 but not over $612,350 $93,257 plus 35% of the excess over $408,200
Over $612,350 $164,709.50 plus 37% of the excess over $612,350
For single individuals (other than heads of households and surviving spouses):
If taxable income is: The tax is:
Not over $9,700 10% of taxable income
Over $9,700 but not over $39,475 $970 plus 12% of the excess over $9,700
Over $39,475 but not over $84,200 $4,543 plus 22% of the excess over $39,475
Over $84,200 but not over $160,725 $14,382.50 plus 24% of the excess over $84,200
Over $160,725 but not over $204,100 $32,748.50 plus 32% of the excess over $160,725
Over $204,100 but not over $510,300 $46,628.50 plus 35% of the excess over $204,100
Over $510,300 $153,798.50 plus 37% of the excess over $510,300
For heads of household:
If taxable income is: The tax is:
Not over $13,850 10% of taxable income
Over $13,850 but not over $52,850 $1,385 plus 12% of the excess over $13,850
Over $52,850 but not over $84,200 $6,065 plus 22% of the excess over $52,850
Over $84,200 but not over $160,700 $12,962 plus 24% of the excess over $84,200
Over $160,700 but not over $204,100 $31,322 plus 32% of the excess over $160,700
Over $204,100 but not over $510,300 $45,210 plus 35% of the excess over $204,100
Over $510,300 $152,380 plus 37% of the excess over $510,300
For marrieds filing separate returns:
If taxable income is: The tax is:
Not over $9,700 10% of taxable income
Over $9,700 but not over $39,475 $970 plus 12% of the excess over $9,700
Over $39,475 but not over $84,200 $4,543 plus 22% of the excess over $39,475
Over $84,200 but not over $160,725 $14,382.50 plus 24% of the excess over $84,200
Over $160,725 but not over $204,100 $32,748.50 plus 32% of the excess over $160,725
Over $204,100 but not over $306,175 $46,628.50 plus 35% of the excess over $204,100
Over $306,175 $82,354.75 plus 37% of the excess over $306,175
For estates and trusts:
If taxable income is: The tax is:
Less than $2,600 10% of taxable income
Over $2,600 but not over $9,300 $260 plus 24% of the excess over $2,600
Over $9,300 but not over $12,750 $1,868 plus 35% of the excess over $9,300
Over $12,750 $3,075.50 plus 37% of the excess over $12,750

Standard deductions.  The basis standard deduction for 2019 will be:

Joint return or surviving spouse $24,400
Single (other than head of household or surviving spouse) $12,200
Head of household $18,350
Married filing separate returns $12,200

For an individual who can be claimed as a dependent on another’s return, the basic standard deduction for 2019 will be $1,100, or $350 plus the individual’s earned income, whichever is greater. However, the standard deduction may not exceed the regular standard deduction for that individual.

For 2019, the additional standard deduction for married taxpayers 65 or over or blind will be $1,300. For a single taxpayer or head of household who is 65 or over or blind, the additional standard deduction for 2019 will be $1,650.

While the dependency exemption deduction under Code Sec. 151 is reduced to zero from 2018 through 2025, this reduction isn’t taken into account for other purposes of the Code, such as who is a qualifying relative for family credit purposes, and eligibility for head-of-household status. For 2019, this amount is $4,200.

Capital gains.  For 2019, the capital gains tax rates will be as follows:

The 0% capital gains rate applies to adjusted net capital gain of up to:

  • . . . Joint returns and surviving spouses—$78,750
  • . . . Married taxpayers filing separately—$39,375
  • . . . Heads of household—$52,750
  • . . . Single filers—$39,375
  • . . . Estates and trusts—$2,650

The 15% capital gains tax rate applies to adjusted net capital gain over the amount subject to the 0% rate, and up to:

  • . . . Joint returns and surviving spouses—$488,850
  • . . . Married taxpayers filing separately—$244,425
  • . . . Heads of household—$461,700
  • . . . Single filers—$434,550
  • . . . Estates and trusts—$12,950

The 20% capital gains tax rate applies to adjusted net capital gain over the above 15%-maximum amounts.

Kiddie tax. The exemption from the kiddie tax for 2019 will be $2,200. A parent will be able to elect to include a child’s income on the parent’s return for 2019 if the child’s income is more than $1,100 and less than $11,000.

AMT exemption for child subject to kiddie tax. The AMT exemption for 2019 for a child subject to the kiddie tax will be the lesser of (1) $7,750 plus the child’s earned income, or (2) $71,700.

AMT figures. For 2019, the AMT exemption amounts will be:

  • . . . Joint returns or surviving spouses—$111,700
  • . . . Unmarried individuals (other than surviving spouses)—$71,700
  • . . . Married individuals filing separate returns—$55,850
  • . . . Estates and trusts—$25,000

For 2019, the excess taxable income above which the 28% tax rate applies will be $97,400 for married persons filing separately, and $194,800 for joint returns, unmarried individuals and estates and trusts.

For 2019, the amounts used under Code Sec. 55(d)(3) to determine the phaseout of the AMT exemption amounts will be:

  • . . . Joint returns or surviving spouses—$1,020,600
  • . . . Unmarried individuals (other than surviving spouses)—$510,300
  • . . . Married filing separate returns—$510,300
  • . . . Estates and trusts—$83,500

Income-based limitations on Sec. 199A/qualified business income deduction.  For 2019, taxpayers with taxable income above $160,700 for single and head of household returns, $321,400 for joint filers, and $160,725 for married filing separate returns are subject to certain limitations on the Code Sec. 199A deduction.

Excess business loss disallowance rule.  Under Code 461(l), an excess business loss for the tax year is the excess of aggregate deductions of the taxpayer attributable to the taxpayer’s trades and businesses, over the sum of aggregate gross income or gain of the taxpayer plus a threshold amount. For 2019, the threshold amount is $510,000 for married individuals filing jointly and $255,000 for other individuals.

Educator expenses. For 2019, eligible elementary and secondary school teachers can claim an above-the line deduction for up to $250 per year of expenses paid for books and certain other supplies used in the classroom.

Interest exclusion for higher education. For 2019, the phase-out for excluding interest on U.S. savings bonds redeemed to pay qualified higher education expenses will begin at modified adjusted gross income (MAGI) above $81,100 ($121,600 on a joint return).

Qualified transportation fringe benefits. For 2019, an employee will be able to exclude up to $265 a month for qualified parking expenses, and up to $265 a month of the combined value of transit passes and transportation in a commuter highway vehicle.

Refundable child credit. For 2019, the child credit will be refundable, subject to the limit described below, to the extent of the greater of:

  • . . . 15% of earned income above $2,500, or
  • . . . for taxpayers with three or more qualifying children, the excess of the taxpayer’s social security taxes for the tax year over his or her earned income tax credit for the year. (Code Sec. 24(d))

Earned income tax credit. For 2019, the maximum amount of earned income on which the earned income tax credit will be computed is $6,920 for taxpayers with no qualifying children, $10,370 for taxpayers with one qualifying child, and $14,570 for taxpayers with two or more qualifying children.

For 2019, the phaseout of the allowable earned income tax credit will begin at $14,450 for joint filers with no qualifying children ($8,650 for others with no qualifying children), and at $24,820 for joint filers with one or more qualifying children ($19,030 for others with one or more qualifying children).

Checkmark Observation:  Taxpayers must use IRS tables to determine the amount of their earned income tax credit. While these tables are based on the inflation-adjusted figures set out above, because the credit under the tables is the same for everyone within a $50 range, there may be slight differences between the credit under the tables and the credit the taxpayer would determine using those inflation-adjusted figures.

The amount of disqualified income (generally investment income) a taxpayer may have before losing the entire earned income tax credit will be $3,600 for 2019.

Lifetime learning credit phaseout. For 2019, a taxpayer’s MAGI in excess of $58,000, $116,000 for a joint return will be used to determine the reduction under Code Sec. 25A(d)(2) in the amount of the Lifetime Learning Credit otherwise allowable under Code Sec. 25A(a)(2).

Adoption credit. For 2019, the credit allowed for an adoption of a child with special needs will be $14,080. The maximum credit allowed for other adoptions will be the amount of qualified adoption expenses up to $14,080.

For 2019, the credit will begin to phase out for taxpayers with MAGI in excess of $211,160. The phaseout will be complete if MAGI is $251,160.

Adoption exclusion. For 2019, the amount that can be excluded from an employee’s gross income for the adoption of a child with special needs will be $14,080. For 2019, the maximum amount that can be excluded from an employee’s gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee will be $14,080.

For 2019, the amount excludable from an employee’s gross income will begin to phase out for taxpayers with MAGI in excess of $211,160. The phaseout will be complete if MAGI is $251,160.

Student loan interest deduction. For 2019, the deduction phases out ratably for taxpayers other than joint filers with MAGI between $70,000 and $85,000, and MAGI between $140,000 and $170,000 for joint filers.

MAGI limits for making deductible contributions by active plan participants to traditional IRAs. In general, an individual who isn’t an active participant in certain employer-sponsored retirement plans, and whose spouse isn’t an active participant, may make an annual deductible cash contribution to an IRA up to the lesser of: (1) an inflation-adjusted statutory dollar limit, or (2) 100% of the compensation that’s includible in his or her gross income for that year. For 2019, the statutory dollar limit is $6,000, plus an additional $1,000 for those age 50 or older. If the individual (or his or her spouse) is an active plan participant, the deduction phases out over a specified dollar range of MAGI.

For taxpayers filing joint returns, the otherwise allowable deductible contribution will be phased out ratably for 2019 for MAGI between $103,000 and $123,000.

For 2019, for single taxpayers and heads of household, the otherwise allowable deductible contribution will be phased out ratably for MAGI between $64,000 and $74,000. For married taxpayers filing separate returns, the otherwise allowable deductible contribution will be phased out ratably for MAGI between $0 and $10,000.

For a married taxpayer who is not an active plan participant but whose spouse is such a participant, the otherwise allowable deductible contribution will be phased out ratably for 2019 for MAGI between $193,000 and $203,000.

MAGI limits for making contributions to Roth IRAs. Individuals may make nondeductible contributions to a Roth IRA, subject to the overall limit on IRA contributions. The maximum annual contribution that can be made to a Roth IRA is phased out for taxpayers with MAGI over certain levels for the tax year. For taxpayers filing joint returns, the otherwise allowable contributions to a Roth IRA will be phased out ratably for 2019 for MAGI between $193,000 and $203,000. For single taxpayers and heads of household, it will be phased out ratably for MAGI between $122,000 and $137,000. For married taxpayers filing separate returns, the otherwise allowable contribution will continue to be phased out ratably for MAGI between $0 and $10,000.

Saver’s credit. For tax years beginning in 2019, an eligible lower-income taxpayer can claim a nonrefundable tax credit for the applicable percentage (50%, 20%, or 10%, depending on filing status and AGI) of up to $2,000 of his or her qualified retirement savings contributions, as follows:

  • . . . Joint filers: $0 to $38,500, 50%; $38,500 to $41,500, 20%; and $41,500 to $64,000, 10% (no credit if AGI is above $64,000).
  • . . . Heads of households: $0 to $28,875, 50%; $28,875 to $31,125, 20%; and $31,125 to $48,000, 10% (no credit if AGI is above $48,000).
  • . . . All other filers: $0 to $19,250, 50%; $19,250 to $20,750, 20%; and $20,750 to $32,000, 10% (no credit if AGI is above $32,000).

Expensing. The amount that may be expensed under Code Sec. 179 for 2019 will be $1,020,000. For 2019, the expensing limit will be reduced when more than $2,550,000 of expensing-eligible property is placed in service.

For sport utility vehicles subject to the Code Sec. 280F limitation, the amount that can be expensed under Code Sec. 179 for 2019 is $25,500.

Small business exception. Taxpayers that qualify as “small businesses” under Code Sec. 448(c) are eligible for exceptions to a number of rules and limitations:

  • The business interest limitation under Code Sec. 163(j)(3);
  • The Code Sec. 263A UNICAP requirement that direct and certain indirect costs allocable to real or tangible personal property produced by a taxpayer be capitalized into the basis of that property;
  • The prohibition on the use of the cash method for C corporations and certain partnerships under Code Sec. 448(b)(3);
  • The requirement under Code Sec. 460(e) that taxable income from a long-term contract be determined under the percentage-of-completion method; and
  • The requirement to keep inventories under Code Sec. 471.

To qualify as a “small business,” a taxpayer must, among other things, satisfy a “gross receipts” test. For 2019, the gross-receipts test is satisfied if, during the 3-year testing period, average annual gross receipts don’t exceed $26 million.

Long-term care premiums. Amounts paid for insurance that covers qualified long-term care services are treated as medical expenses up to specified dollar limits that vary with the age of the taxpayer as of the close of the tax year. For 2019, the dollar limits will be: for a taxpayer age 40 or younger, $420; more than 40 but not more than 50, $790; more than 50 but not more than 60, $1,580; more than 60 but not more than 70, $4,220; and more than 70, $5,270.

Payments received under qualified long-term care insurance.  Amounts received under a qualified long-term care insurance contract are generally excludable as amounts received for personal injuries and sickness, subject to a per diem limitation, which will be $370 in 2019.

Archer MSAs. For Archer medical savings account (MSA) purposes, in 2019, a “high deductible health plan” will be a health plan—

  • with an annual deductible of at least $2,350 and not more than $3,500, in the case of self-only coverage; and
  • with an annual deductible of at least $4,650 and not more than $7,000, in the case of family coverage; and
  • under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits doesn’t exceed: for self-only coverage, $4,650; and for family coverage, $8,550.

Limit on health FSA salary reduction contributions under a cafeteria plan. For purposes of determining whether a health FSA benefit will be a “qualified benefit” under Code Sec. 125 for the 2019 plan year, the cafeteria plan must provide that an employee may not elect to have salary reduction contributions in excess of $2,700 made to the health FSA.

Premium tax credit—limitations on repayment. If the amount of advance premium tax credit payments paid to an insurer on a taxpayer’s behalf exceeds the amount of premium tax credit to which the taxpayer is ultimately entitled, the excess is owed as an additional income tax liability, subject to certain inflation-adjusted limitations based on the taxpayer’s household income.

For 2019, the maximum amount the taxpayer repays is:

  • . . . for unmarried individuals (other than surviving spouses and heads of household) with household income under 200% of the federal poverty line (FPL), $300; 200%-300% of FPL, $800; and 300%-400% of FPL, $1,325; and
  • . . . for all other taxpayers with household income under 200% of FPL, $600; 200%-300% of FPL, $1,600; and 300%-400% of FPL, $2,650.

Small employer health insurance credit. An eligible small employer may claim, subject to a phaseout, a credit equal to 50% of nonelective contributions for health insurance for its employees. The credit is reduced under certain circumstances, including if the average annual full-time equivalent wages per employee are more than $27,100 for 2019.

Qualified small employer IRA. For 2019, a qualified small employer HRA under Code Sec. 9831(d)(2) is an arrangement which, among other requirements, makes payments and reimbursements for qualifying medical care expenses of an eligible employee that do not exceed $5,150, or $10,450 in the case of an arrangement that also provides for payments or reimbursements for family members of the employee.

Insubstantial benefit charitable contribution limitation. Certain de minimis benefits provided by a charity to a donor don’t affect the donor’s charitable contribution deductions. Under these rules, charitable contributions will be fully deductible in 2019 if (1) the donor makes a minimum payment of $55.50 (and receives certain benefits with a cost of not more than $11.10 or (2) the charity mails or otherwise distributes free unordered “low-cost articles” with a cost of not more than $11.10. In addition, charitable contributions will be fully deductible if the benefit received by the donor isn’t more than the lesser of $111 or 2% of the amount of the contribution.

Dues paid to agricultural or horticultural organizations. Annual dues not exceeding $169 for 2019 for membership in an agricultural or horticultural organization won’t be unrelated business income despite any benefits or privileges to which members of the organization will be entitled.

Reporting exemption for exempt organizations with lobbying expenditures. For 2019, social welfare, agricultural and horticultural organizations are exempt from the requirement that they report to their members the portion of their dues allocable to lobbying if 90% or more of their annual dues are received from persons, families, or entities who pay dues of $117 or less.

Maximum hourly fee for attorneys under Sec. 7430(c)(1). The maximum hourly amount allowed for attorney’s fees to a prevailing party under Code Sec. 7430(c)(1) will be $200 an hour for fees incurred in 2019.

Mechanics’ lien priority over tax liens. The holder of a lien for $7,970 or less for the repair or improvement of a personal residence will have priority over notices of tax liens filed in 2019.

Sales price priority over tax liens. A nondealer purchaser of household goods, personal effects, etc. will be protected against a tax lien filed in 2019 if the sales price is not over $1,590.

Property exempt from levy. The value of property exempt from levy under Code Sec. 6334(a)(2) (fuel, provisions, furniture, and other household personal effects, as well as arms for personal use, livestock, and poultry) may not exceed $9,540 for levies in 2019. The value of property exempt from levy under Code Sec. 6334(a)(3) (books and tools necessary for the trade, business, or profession of the taxpayer) may not exceed $4,770 for levies issued in 2019.

The weekly amount of an individual’s salary, wages, etc. exempt from levy for 2019 is $4,200 multiplied by the number of the taxpayer’s dependents for the tax year of the levy, plus the taxpayer’s standard deduction, divided by 52.

“Seriously delinquent” tax debt warranting revocation or denial of passport. For 2019, the State Department can take action to revoke or limit the passport of an individual with a “seriously delinquent tax debt,” as defined in Code Sec. 7345, in excess of $52,000.

Low-income housing credit figures. For 2019, the per low-income qualified basis amount under Code Sec. 42(e)(3)(A)(ii) is $7,000. The population component of the state low-income housing credit ceiling dollar amount under Code Sec. 42(h)(3)(C)(ii) for 2019 is the greater of: (1) $2.75625 multiplied by the state population, or (2) $3,166,875. These figures reflect a statutory increase under Code Sec. 42(h)(3)(l) in effect from 2018 through 2021.

State ceiling for volume caps on qualified bonds. For 2019, the amount used under Code Sec. 146(d)(1) to calculate the State ceiling for the volume cap for private activity bonds is the greater of (1) $105 multiplied by the state population, or (2) $316,745,000.

Loan limits on agricultural bonds. For 2019, the loan limit amount on agricultural bonds under Code Sec. 147(c)(2) is $543,800.

Arbitrage rebate computation credit. For any bond year ending in 2019, the amount of the computation credit under Reg. § 1.148-3(d)(4) is $1,730.

Nonlife insurance company’s election to be taxed only on investment income. For 2019, nonlife insurance companies with net written premiums (or direct written premiums if greater) not in excess of $2,300,000 in the tax year may elect to be taxed at regular corporate rates only on taxable investment income, instead of being taxed on both investment and underwriting income.

Safe harbor for broker commissions. For calendar year 2019, under Reg. § 1.148-5(e)(2)(iii)(B)(1), a broker’s commission or similar fee for the acquisition of a guaranteed investment contract or investments purchased for a yield restricted defeasance escrow is reasonable if (1) the amount of the fee that the issuer treats as a qualified administrative cost does not exceed the lesser of (A) $41,000, and (B) 0.2% of the computational base or, if more, $4,000; and (2) the issuer does not treat more than $115,000 in brokers’ commissions or similar fees as qualified administrative costs for all guaranteed investment contracts and investments for yield restricted defeasance escrows purchased with gross proceeds of the issue.

Deemed substantiation for reimbursement of employees’ expenses. Under an optional deemed substantiation rule, eligible employers in the pipeline construction industry can provide reimbursements that will be treated as made under an accountable plan to employees who furnish welding rigs or mechanics rigs. For calendar year 2019, an eligible employer may pay up to $18 per hour for rig-related expenses. If the employer provides fuel or otherwise reimburses fuel expenses, an eligible employer may pay up to $11 per hour.

Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2019, the exclusion amount will be $11,400,000.

Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $11,400,000 for transfers in 2019.

Gift tax annual exclusion. For gifts made in 2019, the gift tax annual exclusion will be $15,000.

Special use valuation reduction limit. For estates of decedents dying in 2019, the limit on the decrease in value that can result from the use of special valuation will be $1,160,000.

Determining 2% portion for interest on deferred estate tax. In determining the part of the estate tax that is deferred on a farm or closely-held business that is subject to interest at a rate of 2% a year, for decedents dying in 2019, the tentative tax will be computed on $1,550,000 plus the applicable exclusion amount.

Annual exclusion for gifts to noncitizen spouses. For gifts made in 2019, the annual exclusion for gifts to noncitizen spouses will be $155,000.

Reporting foreign gifts. If the value of the aggregate “foreign gifts” received by a U.S. person (other than an exempt Code Sec. 501(c) organization) exceeds a threshold amount, the U.S. person must report each “foreign gift” to IRS. (Code Sec. 6039F(a)) Different reporting thresholds apply for gifts received from (a) nonresident alien individuals or foreign estates, and (b) foreign partnerships or foreign corporations. For gifts from a nonresident alien individual or foreign estate, reporting is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year. For gifts from foreign corporations and foreign partnerships, the reporting threshold amount will be $16,388 in 2019.

Expatriation. For 2019, an individual with “average annual net income tax” of more than $168,000 for the five tax years ending before the date of the loss of U.S. citizenship will be a covered expatriate.  Under a mark-to-market deemed sale rule, all property of a covered expatriate is treated as sold on the day before the expatriation date for its fair market value. However, for 2019, the amount that would otherwise be includible in the gross income of any individual under these mark-to-market rules will be reduced by $725,000. (Code Sec. 877A(a)(3))

Checkmark

Foreign earned income exclusion. The foreign earned income exclusion amount will be $105,900 in 2019.

Failure to file tax return. For 2019, the minimum penalty under Code Sec. 6651(a) for failure to timely file a tax return is $215.

Failure to file certain information returns, registration statements, etc. For 2019, the following penalty amounts under Code Sec. 6652 apply.

  1. For failure to file an annual return required under Code Sec. 6033(a)(1) (for exempt organizations) or Code Sec. 6012(a)(6) (for political organizations):
    1. for an organization under Code Sec. 6652(c)(1)(A), $20 per day, subject to a $10,500 maximum;
    2. for an organization with gross receipts exceeding $1,067,000: $105 per day subject to a $53,000 maximum; for managers under Code Sec. 6652(c)(1)(B), $10 per day subject to a $5,000 maximum; for public inspection of annual returns and reports under Code Sec. 6652(c)(1)(C), $20 per day subject to a $10,500 maximum; and for public inspection of applications for exemption and notice of status under Code Sec. 6652(c)(1)(D), $20 per day with no maximum.
  2. For failure to file a return required under Code Sec. 6034 (for certain trusts) or Code Sec. 6043(b) (relating to terminations, etc., of exempt organizations):
    1. for an organization or trust under Code Sec. 6652(c)(2)(A), $10 per day subject to a $5,000 maximum;
    2. for managers under Code Sec. 6652(c)(2)(B), $10 per day subject to a $5,000 maximum;
    3. for split-interest trusts under Code Sec. 6652(c)(2)(C)(ii), $20 per day subject to a $10,500 maximum; and
    4. for any trust with gross receipts exceeding $266,500 under Code Sec. 6652(c)(2)(C)(ii)  $105 per day subject to a $53,000 maximum.
  3. For failure to file a disclosure required under Code Sec. 6033(a)(2):
    1. for a tax-exempt entity under Code Sec. 6652(c)(3)(A), $105 per day subject to a $53,000 maximum; and
    2. for failure to comply with written demand under Code Sec. 6652(c)(3)(B)(ii), $105 per day subject to a $10,500 maximum.

Other assessable penalties with respect to the preparation of tax returns for other persons. For 2019, the following penalty amounts under Code Sec. 6695 apply:

  1. For failure to furnish a copy to taxpayer under Code Sec. 6695(a), failure to sign return under Code Sec. 6695(b), failure to furnish identifying number under Code Sec. 6695(c), failure to retain a copy or list under Code Sec. 6695(d), $50 per return or claim for refund subject to a maximum penalty of $26,500.
  2. For failure to file correct information returns under Code Sec. 6695(e), $50 per return or item in return subject to a $26,500 maximum.
  3. For negotiation of check under Code Sec. 6695(f), $530 per check with no limit.
  4. For failure to be diligent in determining eligibility for the earned income, child tax, additional child tax, and American opportunity tax credits, and eligibility to file as a head of household, under Code Sec. 6695(g), $530 per return or claim for refund with no limit.

Failure to file partnership return. For 2019, the dollar amount used to determine the amount of the penalty under Code Sec. 6698(b)(1) is $205.

Failure to file S corporation return. The dollar amount used to determine the amount of the penalty under Code Sec. 6699(b)(1) is $205.

Failure to file correct information returns. For 2019, the penalty amounts under Code Sec. 6721 are:

  1. For persons with average annual gross receipts for the most recent three tax years of more than $5 million, for failure to file correct information returns:
    1. under Code Sec. 6721(a)(1)‘s general rule, $270 per return subject to a $3,339,000 calendar year maximum;
    2. if corrected on or before 30 days after the required filing date under Code Sec. 6721(b)(1), $50 per return subject to a $556,500 calendar year maximum; and
    3. if corrected after the 30th day but on or before August 1 under Code Sec. 6721(b)(2), $110 per return subject to a $1,669,500 calendar year maximum.
  2. For persons with average gross receipts for the most recent three tax years of $5 million or less, for failure to file correct information returns:
    1. under Code Sec. 6721(d)(1)(A)‘s general rule, $270 per return subject to a $1,113,000 calendar year maximum;
    2. if corrected on or before 30 days after the required filing date under Code Sec. 6721(d)(1)(B), $50 per return subject to a $194,500 calendar year maximum; and
    3. if corrected after the 30th day but on or before August 1 under Code Sec. 6721(d)(1)(C), $110 per return subject to a $556,500 calendar year maximum.
  3. For failure to file correct information returns due to intentional disregard of the filing requirement (or the correct information reporting requirement):
    1. under Code Sec. 6721(e)(2)(A), for a return other than a return required to be filed under Code Sec. 6045(a)Code Sec. 6041A(b)Code Sec. 6050HCode Sec. 6050ICode Sec. 6050JCode Sec. 6050K, or Code Sec. 6050L, per-return penalty equal to the greater of $550 or 10% of the aggregate amount of items required to be reported correctly with no limit;
    2. under Code Sec. 6721(e)(2)(B), for a return to be filed under Code Sec. 6045(a)Code Sec. 6050K, or Code Sec. 6050L, per-return penalty equal to the greater of $550 or 5% of the aggregate amount of items required to be reported correctly with no limit;
    3. under Code Sec. 6721(e)(2)(C), for a return required to be filed under Code Sec. 6050I(a), per-return penalty equal to the greater of $27,820 or the amount of cash received up to $111,000; and
    4. under Code Sec. 6721(e)(2)(D), for a return required to be filed under Code Sec. 6050V, per-return penalty equal to the greater of $550 or 10% of the value of the benefit of any contract with respect to which information is required to be included on the return with no limit.

Failure to furnish correct payee statements. For 2019, the penalty amounts under Code Sec. 6722 are:

  1. For persons with average annual gross receipts for the most recent three tax years of more than $5 million:
    1. under Code Sec. 6722(a)(1)‘s general rule, $270 penalty per return subject to a $3,339,000 calendar year maximum;
    2. if corrected on or before 30 days after the required filing date under Code Sec. 6722(b)(1), $50 per return subject to a $556,500 calendar year maximum; and
    3. if corrected after the 30th day but on or before August 1 under Code Sec. 6722(b(2),  $110 per return subject to a $1,669,500 calendar year maximum.
  2. For persons with average annual gross receipts for the most recent three tax years of $5 million or less:
    1. under Code Sec. 6722(d)(1)(A)‘s general rule, $270 per return subject to a $1,113,000 calendar year maximum;
    2. if corrected on or before 30 days after the required filing date under Code Sec. 6722(d)(1)(B), $50 per return subject to a $194,500 calendar year maximum; and
    3. if corrected after 30th day but on or before August 1 under Code Sec. 6722(d)(1)(C), $110 per return subject to a $556,500 calendar year maximum.
  3. Where failure is due to intentional disregard of the requirement to furnish a payee statement (or the correct reporting requirement):
    1. under Code Sec. 6722(e)(2)(A), for a statement other than one required under Code Sec. 6045(b)Code Sec. 6041A (in respect of a return required under Code Sec. 6041A(b)), Code Sec. 6050H(d)Code Sec. 6050J(3), Code Sec. 6050K(b), or Code Sec. 6050L(c), per-return penalty equal to the greater of $550 or 10% of the aggregate amount of items required to be reported correctly with no limit; and
    2. under Code Sec. 6722(e)(2)(B), for a payee statement required under Code Sec. 6045(b)Code Sec. 6050K(b), or Code Sec. 6050L(c), per-return penalty equal to the greater of $550 or 5% of the aggregate amount of items required to be reported correctly with no limit.
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