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Big Changes to AZ Tax Law

This news makes me smile. I know, it's a little weird when changes to the tax law make a person smile, but this one is good for the majority of people who pay income taxes in Arizona. A big thank you to the legislature and Gov. Ducey for not only fixing the conformity issue for 2018, but putting a tax plan in place through 2021. 

What's new in AZ tax law?

  • AZ will now match federal standard deduction beginning with the 2019 tax year ($12,200 single/married filing separate, $18,350 head of household, $24,400 married filing joint). This is a HUGE increase.
  • AZ removes the personal  and dependent exemptions (again this matches with the federal tax law)
  • AZ has a new $100 credit for dependents under 17 years old, and $25 credit for dependents 17 and older (similar to federal tax law) this credit phases out for singles with income over $200,000 and for married filing jointly with income over $400,000.
  • AND you can increase your standard deduction by 25% of charitable donations that would have been claimed as an itemized deduction

With all of these wonderful changes, there are some  changes to the tax brackets as well. The first two brackets from prior years have been combined at the lower rate. This means that taxpayers who had taxable income between $10,602 - $26,501 will be paying less in the futures. Additionally, each of the other brackets has a small tax cut. The top tax rate in AZ decreased from 4.54% to 4.50%. 

Tax Rate Schedule for Tax Year 2019 and going forward

Single Married Filing Jointly Tax Rate
$0-26,500 $0-53,000 2.59%
$26,501-$53,000 $53,000-$106,000 3.34%
$53,001-$159,000 $106,001-$318,000 4.17%
$159,001 and over $318,001 and over 4.50%

 

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Please Note: We are NOT attorneys and do NOT provide legal advice. Your information is confidential, but we do not have attorney-client privilege. If you need legal advice, you will be referred to an attorney.

Arlene Rheinfelder, EA, CP AZCLDP

"I help solve people's problems. There is nothing more rewarding than helping someone through a difficult situation, and helping them to find a good resolution." 

 

Melissa Hill, AZCLDP

I love the challenge of finding a way to help each person's unique situation. It is never the same because each person is different with their own needs and wants.

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