TAX FACTS: 2018 & Beyond

Tax Bracket / Filing Status Single Married Filing Jointly or Qualifying Widow Married Filing Separately Head of Household
10% $0 to $9,700 $0 to $19,400 $0 to $9,700 $0 to $13,850
12% $9,701 to $39,475 $19,401 to $78,950 $9,701 to $39,475 $13,851 to $52,850
22% $39,476 to $84,200 $78,951 to $168,400 $39,476 to $84,200 $52,851 to $84,200
24% $84,201 to $160,725 $168,401 to $321,450 $84,201 to $160,725 $84,201 to $160,700
32% $160,726 to $204,100 $321,451 to $408,200 $160,726 to $204,100 $160,701 to $204,100
35% $204,101 to $510,300 $408,201 to $612,350 $204,101 to $306,175 $204,101 to $510,300
37% $510,301 or more $612,351 or more $306,176 or more $510,301 or more

Standard Deduction : Married filing Joint & Qualifying Widow(er) $24,000, Head of Household $18,000, Single & Married Filing Separately $12,000.

Personal Exemption : has been eliminated.

Child Tax Credit : has been doubled to $2,000 per child beginning in 2018 and is available to be claimed for all your qualified children under age 17 at the end of the year.

AMT Exemption amount : $109,400 joint, $70,300 single or head of household, $54,700 married filing separately.

AMT Exemption amount : $109,400 joint, $70,300 single or head of household, $54,700 married filing separately.

Education credit : American Opportunity Tax Credit of $2,500 (100% of the first $2,000 of qualified expenses and 25% of the next $2,000) per student, subject to limitation due to adjusted gross income (not available to individuals with income exceeding $80,000 and for married couples with income exceeding $160,000).

Student Loan Interest Deduction : A maximum deduction of $2,500 that phases out for individuals with incomes (AGI) between $65,000 and $80,000 and phases out for married couples with AGI’s between $130,000 and $160,000).

Mileage Deductions

The following table provides an overview:

Mileage Per Mile
Business $0.545 in 2018
Charity $0.14 (does not change, set by statute)
Medical $0.18 in 2018
Moving $0.18 in 2018

IRA Deduction : Follow this link to see the latest from the IRS : https://www.irs.gov/retirement-plans/ira-deduction-limits

HSA Deduction : Single maximum is $3,450, family maximum $6,900 with $1,000 catch-up for 55 and older.

401(k) Contribution Limits : $18,500 Catch-up limit is $6,000.00 for a total possible of $24,500

FICA Limit: : $132,900 for 2019, $128,400 for 2018

Section 179 : $1,000,000, No reduction in this deduction until capital purchases exceed $2,500,000 of property investment on new or used equipment.

Bonus depreciation : for either new or used equipment; a deduction of 100% for equipment purchases made between September 28, 2017 and December 31, 2022.

IRA Required Minmum Distribution (RMD) : begins at age 70 ½, see IRS FAQ’s at following link : https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions

Annual Gift Tax Exclusion : $15,000; Federal Estate/Gift Tax Unified Exclusion: $5,490,000 for 2017 and $11,180,000 for 2018. For Illinois, the exclusion is $4,000,000 for 2017 and the same for 2018.

For 2018, FICA taxes are required to be withheld from employee pay at a rate of 6.2% of the first $128,400 and 1.45% for unlimited pay for medicare. An additional medicare tax of 0.9% is required to be withheld from that portion of payroll exceeding $200,000 in a calendar year for those filing as single, head of household and qualifying widow(er) with qualifying child and $250,000 for those filing as married filing jointly.

Helpful links

Internal Revenue Service (IRS) – home page :http://www.irs.gov/

IRS – Application for EIN : http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

IRS – Individual Tax Return Refund status : https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp

IRS – Tax Form W9 : https://www.irs.gov/pub/irs-pdf/fw9.pdf

IRS – Instalment Payment Plan : https://www.irs.gov/payments/online-payment-agreement-application

National Do Not Call Registry : https://www.donotcall.gov