2018 Tax Updates

New Tax Updates for 2018!

Other Dependent Credit
$500 nonrefundable credit for each qualifying dependent on the return (other than children under 17).

529 Education Savings Plan
The new tax law allows 529 distributors to cover K-12 educational costs in addition to college.

Other Tax Updates for 2018

Child Tax Credit

The Child Tax Credit increased from 2017 to $2,000 for a dependent child who is under 17 years old and did not turn 17 during that year.  But, the final amount of tax credit received on the tax return can be affected per annual income. Phase-out was also raised to $200K for single filers and $400K for married filing joint.

Charitable Contributions
Donating to IRS recognized charitable organizations, whether cash or non-cash, can help increase deductions and reduce your taxable income. Donate as much as possible and keep your receipts.

Medical Deductions
Medical deductions decreased from 2017. Out-of-pocket medical expenses must exceed 7.5% of your Adjusted Gross Income and do not include pre-tax payroll deductions toward health insurance.

Gift Exclusions
A maximum of $15,000 per person is allowed for gift exclusions but isn’t tax deductible by the gifter. It is also not considered taxable income for the recipient.

401K Contributions
A maximum of $18,500 for those under 50 years old, and for those above 50 you may add an additional $6,000 as ‘catch-up contributions’.

IRA Contribution Phase-Out
Adjusted Gross Income (AGI) for:

Married filing jointly can take a full deduction up to the amount of your contribution limit if your AGI is up to $101,000 and a partial deduction with an AGI up to $121,000.

Single or Head of Household can take a full deduction up to the amount of your contribution limit if your AGI is up to $63,000 and a partial deduction with an AGI up to $73,000.

Married filing separately can take a partial deduction with an AGI up to less than $10,000.

Capital Gains
Any short-term capital gains are taxed like regular income, however, long-term gains are taxed at 0%, 15%, or 20% depending on your income and your filing status.

2018 Marginal Tax Brackets

 

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+

Engelbrink CPA Firm LLC

Contact Us

Call Engelbrink CPA Firm for any accounting or tax questions you may have. Schedule an appointment for professional accounting service today!

Ethan@engelbrinkcpa.com

(713) 534-1328

3900 Essex Lane, Suite 535, Houston, TX 77027

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