IRS Updates

STANDARD DEDUCTIONS / 2018
Single or Married Filing Separate
Married Filing Jointly
Head of Household

$12,000.00
$24,000.00
$18,000.00

MARGINAL TAX BRACKET ON
2018 INCOME TAX

(For the following tax status) Single, Head of Household (HOH), Married Filing Jointly (MFJ), and Married Filing Separately (MFS).

Single

10% =
12% =
22% =
24% =
32% =
35% =
37% =

$0-$9525
$9,326-$38,700
$38,701-$82,500
$82,501-$157,500
$157,501-$200,000
$200,001-$500,000
$500,001+

HOH

10% =
12% =
22% =
24% =
32% =
35% =
37% =

$0-$13,600
$13,601-$51,800
$51,801-$82,500
$82,501-$157,500
$157,501-$200,000
$200,001-$500,000
$500,001+

MFJ

10% =
15% =
25% =
28% =
33% =
35% =
39.6% =

$0-$19,050
$19,051-$77,400
$77,401-$165,000
$165,001-$315,000
$315,001-$400,000
$400,001-$600,000 $600,001+

MFS

10% =
15% =
25% =
28% =
33% =
35% =
39.6% =

$0-$9525
$9,526-$38,700
$38,701-$82,500
$82,501-$157,500
$157,501-$200,000
$200,001-$300,000
$300,001+

More Information


NEW FOR 2018!
Other Dependent Credit

$500 nonrefundable credit for each qualifying dependent on the return (other than child under 17)

529 Education Savings Plan

The new tax law allows 529 distributors to cover K-12 educational costs as well as college.


Child Tax Credit

*INCREASE FROM 2017*
Child tax credit is $2,000.00 for a dependent child under the age of 17, and did not turn 17 within that tax year. However, the exact amount of tax credit actually received on the tax return may be affected by the annual income. Phase-out increased to $200K for single filers and $400K for married filing joint.

CHARITABLE CONTRIBUTIONS

Donate as much as possible to IRS recognized charitable organizations. (Cash or Non-Cash). Please obtain a receipt from the organization or charitable foundation. Take pictures of larger items in order to obtain a larger tax deduction for those items. Charitable contributions help to increase deductions and reduce taxable income.

MEDICAL DEDUCTIONS

*DECREASED FROM 2017*
Out-of-pocket medical expenses must exceed 7.5% of Adjusted Gross Income Medical expenses do not include pre-tax payroll deductions for company health insurance benefits.

GIFT EXCLUSIONS

For 2018 a maximum of $15,000/person; however this is not tax deductible to gifter, nor is it taxable income to the recipient.

401K CONTRIBUTIONS

For 2018, maximum contributions of $18,500 under the age of 50. Over the age of 50, an additional $6,000 may be contributed (catch up contributions).

ROTH CONTRIBUTION PHASE-OUT

The Adjusted Gross Income (AGI) phase out range for taxpayers married filing joint in 2017 was $183,000-$193,000 / 2018 = $189,000 - $199,000. Phase out range for single and head of household filer for 2017 was $116,000 and $131,000 / 2018 = $120,000 and $ 135,000 respectively.

CAPITAL GAINS

Short-Term capital gains are taxed as ordinary income. Long term gains are taxed 0%, 15% and 20% depending on income and filing status.

CALL US FOR MORE INFORMATION.