2018 Tax Cheat Sheet


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Happy New Year!

 

Thanks to the new tax law, 2018 brings more changes than just the typical adjustments for inflation. Let’s take a look…

 

Tax Rates

Single:

Taxable Income Tax Rate
$0 to $9,525 10%
$9,526 to $38,700 $952.50 plus 12% of the amount over $9,525
$38,701 to $82,500 $4,453.50 plus 22% of the amount over $38,700
$82,501 to $157,500 $14,089.50 plus 24% of the amount over $82,500
$157,501 to $200,000 $32,089.50 plus 32% of the amount over $157,500
$200,001 to $500,000 $45,689.50 plus 35% of the amount over $200,000
$500,001 or more $150,689.50 plus 37% of the amount over $500,000

Married Filing Jointly or Qualifying Widow(er):

Taxable Income Tax Rate
$0 to $19,050 10%
$19,051 to $77,400 $1,905 plus 12% of the amount over $19,050
$77,401 to $165,000 $8,907 plus 22% of the amount over $77,400
$165,001 to $315,000 $28,179 plus 24% of the amount over $165,000
$315,001 to $400,000 $64,179 plus 32% of the amount over $315,000
$400,001 to $600,000 $91,379 plus 35% of the amount over $400,000
$600,001 or more $161,379 plus 37% of the amount over $600,000


Married Filing Separately:

Taxable Income Tax Rate
$0 to $9,525 10%
$9,526 to $38,700 $952.50 plus 12% of the amount over $9,525
$38,701 to $82,500 $4,453.50 plus 22% of the amount over $38,700
$82,501 to $157,500 $14,089.50 plus 24% of the amount over $82,500
$157,501 to $200,000 $32,089.50 plus 32% of the amount over $157,500
$200,001 to $300,000 $45,689.50 plus 35% of the amount over $200,000
$300,001 or more $80,689.50 plus 37% of the amount over $500,000

Head of Household:

Taxable Income Tax Rate
$0 to $13,600 10%
$13,601 to $51,800 $1,360 plus 12% of the amount over $13,600
$51,801 to $82,500 $5,944 plus 22% of the amount over $51,800
$82,501 to $157,500 $12,698 plus 24% of the amount over $82,500
$157,501 to $200,000 $30,698 plus 32% of the amount over $157,500
$200,001 to $500,000 $44,298 plus 35% of the amount over $200,000
$500,001 or more $149,298 plus 37% of the amount over $500,000

Estates & Trusts:

Taxable Income Tax Rate
$0 to $2,550 10%
$2,551 to $9,150 $255 plus 24% of the amount over $2,550
$9,151 to $12,500 $1,839 plus 35% of the amount over $9,150
$12,501 or more $3,011.50 plus 37% of the amount over $12,500

Corporations:

Taxable Income Tax Rate
$1 or more 21%

 

Standard Deduction

Single $12,000*
Married Filing Jointly $24,000**
Head of Household $18,000*

*Add $1,600 if blind or over age 65

**Add $1,300 if blind or over age 65

 

Note – There is no longer a personal exemption (was $4,050 per person in 2017).

 

Deductions

Itemized:

Itemized Deductions Phase-Out Itemized deductions are no longer phased out; if you itemize, the deductions will be allowed in full
Medical Excess medical expenses over 7.5% of your AGI is deductible
State & Local Taxes (SALT), Sales/State Income Taxes, and Property Taxes Deductible up to $10,000 (in the aggregate)
Mortgage Interest Deductible if mortgage amount is $750,000 or less (begins to phase out for mortgages over $750,000); interest on home equity loans is no longer deductible
Miscellaneous Itemized Deductions No longer allowed

 

Other:

Pass-through entity deduction 20% (subject to income, limitations, thresholds, exclusions, and other factors)
Mileage Business mileage – 54.5 cents/mile; medical/moving mileage 18 cents/mile; charitable mileage – 14 cents/mile
Student Loan Interest Deductible up to $2,500*
Moving Expenses No longer deductible
Teacher (Educator) Expenses $250
Maximum Section 179 deduction $1,000,000
Bonus Depreciation 100% (applies to property placed in service after 9/27/17)

*The student loan interest deduction begins to phase out at the following MAGI levels: married filing jointly – $135,000-$165,000; all others – $65,000-$80,000

 

Credits

American Opportunity Tax Credit Up to $2,500
Child Tax Credit Up to $2,000 (with $1,400 being refundable)
Retirement Tax Credit Income Limit Single – $31,500; Married Filing Jointly – $63,000; Head of Household – $47,250

 

IRA & Pension Plan Limits

IRA Contribution Limit (Roth & Traditional) Under age 50 – $5,500; age 50 and older – $6,500
Phase-Out for Deducting Traditional IRA Contributions AGI levels: Single & Head of Household – $63,000-$73,000; Married Filing Jointly – $189,000-$199,000; Married Filing Separately – $0-$10,000
Phase-Out for Contributing to a Roth IRA MAGI levels: Single & Head of Household – $120,000-$135,000; Married Filing Jointly – $101,000-$121,000; Married Filing Separately – $0-$10,000
401(k), 403(b), 457, and SARSEP Elective Deferral Limits Under age 50 – $18,000; age 50 and older – $24,500
SEP Contribution Up to 25% of compensation (limited to $55,000)
SIMPLE Elective Deferral Limits Under age 50 – $12,500; age 50 and older – $15,500
Defined Contribution Plan – Maximum Annual Addition $55,000
Defined Benefit Plan – Maximum Annual Benefit $220,000
Max Annual Compensation Taken Into Account When Determining Contributions $275,000

AMT

Single & Head of Household Exemption – $73,000; Phase-out – $500,000
Married Filing Jointly Exemption – $109,400; Phase-out – $1,000,000
Estates & Trusts Exemption – $24,600; Phase-out – $82,050
Corporations Corporations are no longer subject to the AMT

Estate & Gift Tax

Annual Gift Exclusion (per recipient) $15,000 (doubled for married couples)
Annual Gift Exclusion to Noncitizen Spouse $152,000
Maximum Estate & Gift Tax Rate 40%
Lifetime Estate/Gift Exemption Amount $11,200,000 (doubled for married couples)

 

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Nick Aiola is a CPA and the owner of Aiola CPA, PLLC. Nick and his team provide the highest quality of tax and advisory services to real estate investors and individuals and business owners in the real estate industry.

Phone – (646) 397-9537

Email – nick@aiolacpa.com

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