2018 Tax Summary

JOINT STATUS

If taxable income is: The tax is:
 Not Over $19,050 10% of the taxable income
 Over $19,050 but not over $77,400 $1,905 plus 12% of the excess over $19,050.
 Over $77,400 but not over $165,000 $8,907 plus 22% of the excess over $77,400.
Over $165,000 but not over $315,000 $28,179 plus 24% of the excess over $165,000.
 Over $315,000 but not over $400,000 $64,179 plus 32% of the excess over $315,000.
Over $400,000 but not over $600,000 $91,379 plus 35% of the excess over $400,000.
 Over $600,000 $161,379 plus 37% of the excess over $600,000.

HEAD OF HOUSEHOLD STATUS

If taxable income is: The tax is:
Not Over $13,350 10% of the taxable income.
Over $13,350 but not over $51,850 $1,360 plus 15% of the excess over $13,600.
Over $51,850 but not over $82,500 $5,944 plus 25% of the excess over $51,850.
Over $82,500 but not over $157,500 $12,698 plus 28% of the excess over $82,500.
Over $157,500 but not over $200,000 $30,698 plus 33% of the excess over $200,000.
Over $400,000 but not over $500,000 $44,298 plus 35% of the excess over $416,700.
Over $500,000 $149,298 plus 39.6% of the excess over $500,000.

UNMARRIED STATUS

If taxable income is: The tax is:
Up to $9,525: 10% of taxable income
Up to $9,525 but not over  $38,700: $952.50, plus 12% of the excess over $9,525.
Up to $51,850 but not over $82,500: $4,453.50, plus 22% of the excess over $51,850.
Over $82,500 but not over $157,500: $14,089.50, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000: $32,089.50, plus 32% of the excess over $157,500.
Over $200,000 but not over $500,000: $45,689.50, plus 35% of the excess over $200,000.
$500,000 and more: $150,689.50, plus 37% of the excess over $500,000.


MARRIED, SEPARATE STATUS

If taxable income is: The tax is:
Up to 13,600

Over $13,600  but not over $51,850

10% of taxable income.

$952.5 0plus 15% of the excess over $19,050.

Over $51,850but not over $82,500 $4,453.50 plus 25% of the excess over $77,400.
Over $82,500but not over $157,500 $14,089.50 plus 28% of the excess over $76,550.
Over $157,500but not over $200,000 $32,089.50 plus 33% of the excess over $116,675.
Over $200,000but not over $300,000 $45,689.50 plus 35% of the excess over $208,350.
Over $300,000 $80,689.50 plus 39.6% of the excess over $235,350.
ESTATES AND TRUSTS  
If taxable income is: The tax is:
Up to 2,550 10% of taxable income
Over $2,550 but not over $9,150 $255 plus 24% of the excess over $2,555
Over $9,150 but not over $12,500 $1,839 plus 35% of the excess over $9,150.
Over $12,500 $3,011.50 plus 37% of the excess over $12,500.

A.    FILING STATUS (single, joint, etc.) controls tax rates, Standard Deductions and many other tax items.

B.      IRA CONTRIBUTION: $5,500; $1,000 catch up contribution for age 50+.

C.      401K CONTRIBUTION: $18,000; $6,000 catch up contribution for age 50+.

D.      STANDARD DEDUCTIONS in 2018 (if not deducting itemized deductions) are:

1.       Joint filers                                               $24,000

2.       Heads of household                             $18,000

3.       Singles                                                     $12,000

4.       Marrieds filing separately                   $12,000

5.       Born after 1/1/53 or blind add            $1,250

6.       +unmarried and not surviving spouse $1,550

E.       ITEMIZED DEDUCTIONS in 2018 are no longer reduced for higher income taxpayers.

1.       Medical expenses for 2018 and 2019 are deductible if in excess of 7.5 percent of adjusted gross in-come, rising to 10 percent beginning in 2020.

2.       State and local taxes. Taxpayer can deduct up to $10,000 in combined state and local income, sales or property taxes

3.       Mortgage interest. The Act grandfathers the treatment of indebtedness incurred on or before December 15, 2017. Mortgage debt borrowed after that to buy a home is limited to $750,000. HELOC interest new or old is not deductible unless used to buy home or improvement

4.       Charitable deductions. No new limits on contributions.

5.       Miscellaneous Deductions are no longer deductible. These include employee job related expenses and investment related expenses like investment adviser’s fees.

F.        Child Tax Credit is expanded from $1,000 to $2,000. The credit begins to phase out for taxpayers with adjusted gross income in excess of $400,000 (in the case of married taxpayers filing a joint return) and $200,000 (for all other taxpayers).

G.      PERSONAL EXEMPTION are no longer deductible

H.      OTHER TAXES

1.       Capital Gains and Qualified Dividends: investments held 12 months and domestic corporation dividends are taxed at lower rates: 0% if you are in 10-15% regular tax brackets, 15% if in 25-35% brackets and 20% for taxpayers in 39.6% bracket.

2.       3.8% Surtax on net investment income applies to the lesser of (a) net investment income or (b) the excess of modified adjusted gross income over “modified adjusted gross income” exceeds $250,000 for joint filers, $125,000 for married separate filers and $200,000 for other taxpayers. Investment income includes interest, dividends, capital gains, annuities, royalties and passive rental income. See Form 8960.

3.       Self-Employment Tax: in addition to your regular taxes, you pay 15.3% self-employment earnings (12.4% Social Security and 2.9% Medicare).

4.       Additional 0.9% Medicare Tax is imposed on wages and self-employment income in excess of $250,000 for joint filers, $125,000 for married separate filers and $200,000 for others. See Form 8959.

5.       Alternative Minimum Tax This 26-28% flat tax applies if it is higher than your regular tax. It denies many deductions, such as state taxes.

About Wis Laughlin

I help clients with tax preparation and IRS representation, estate planning, and complex contracts, including LLC's. As a former IRS tax attorney in their National Office. Law.com picked Wis in 2017 and several prior years as one of the Top Tax and Estate Lawyers in Tennessee. I am your advocate, not your accountant. I don't tell you what you can't do. I show you how to do it.
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