By: Edward Leone Jr. CFP RFC RIA MBA DMD
Contact Information: edleonedds@gmail.com
I have changed the sequence of this blog from monthly to quarterly. It appears that the most significant information to share in this first quarter of 2018 is what information we have on the income tax structure with the new legislation passed by the Congress in December of 2017.
Tax Rates:
Brackets
Individual Filing Joint Filing
10% $0 to $9,525 $0 to $19,050
12% $9,525 to $38,700 $19,050 to $77,400
22% $38,700 to $82,500 $77,400 to $165,000
24% $82,500 to $157,500 $165,000 to $315,000
32% $157,500 to $200,000 $315,000 to $400,000
35% $200,000 to $500,000 $400,000 to $600,000
37% $500,000 and above $600,000 and above
Standard Deduction
Singles $12,000 Married $24,000 Head of Household $18,000
Personal Exemption
Suspended until December 2025
State and Local Tax Deduction
Capped at $10,000
Capital Gains Tax
0% Individuals up to $38,600 Join filers up to $77,200 Head of household $51,700
15% Individuals up to $425,800 Joint filers up to $479,000 Head of household $452,400
20% Individuals above $425,800 Joint filers above $479,200 Head of household above $452,400
The 3.8% NII tax is maintained for incomes above $250,000 while collectables are taxed at 28%.
The ROTH IRA conversion return to a traditional IRA has been repealed.
Medical expenses above 10% of AGI will be deductible as of January 2019.
Child tax credit is now up to $2,000.
Estate tax exclusion is up to $11.2 million per spouse.
As of January 2019 alimony is not deductible by the payor and is not claimed as income by the receiver.
The home mortgage deduction is capped at a $750,000 ceiling.
The Social Security Tax is levied on incomes up to $128,700.
It is very important for business owners to engage the services of a CPA to handle business expense deductions since some of the rules have changed.
This is really simple!!
For qualified retirement saving plans, the following are the tax-deductible contribution limitations:
IRA $5,500
401K $18,500
SEP $55,000 or 25% of income
Keogh Palns $55,000 or 25% of income
Individuals above a threshold age of 50 can make additional contributions to further build their accounts: IRA $6,500, 401K $$24,500.
The phase out levels for many listed deductions are also a bit complicated and need your attention.
We are currently experiencing an equity market correction. I have no crystal ball which tells me how long this will last, but history tells us to stay the course and engage the future turn around.
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