Important Highlights for Tax Year 2018:

The Tax Cuts and Jobs Act is the most significant tax legislation in over 30 years. Below are some of the significant changes.

Tax Rates 2018:

          Individuals:                             Married Filing Jointly:              Married Filing Separately: 
10%  Up to $9,525                             Up to $19,050                             Up to $9,525
12%  $9,526 to $38,700                     $19,051 to $77,400                    $9,526 to $38,700
22%  $38,701 to $82,500                   $77,401 to $165,000                  $38,701 to $82,500
24%  $82,501 to $157,500                 $165,001 to $315,000                $82,501 to $157,500
32%  $157,501 to $200,000               $315,001 to $400,000                $157,501 to $200,000
35%  $200,001 to $500,000               $400,001 to $600,000                $200,001 to $300,000
37%  Over $500,000                          Over $600,000                           Over $300,000

Standard Deduction Increases: 
 Individuals & MFS:              Married Filing Jointly:            Head of Household 
                  2018 - $12,000                    2018 - $24,000                      2018 - $18,000
                  2017 - $6,500                      2017 - $13,000                      2017 - $9,550

Personal Exemption Eliminated:
Under the tax reform, taxpayers can no longer claim the $4,050 personal exemption for themselves and dependents.​

Child Tax Credit Increases:
The Child Tax Credit increases from $1,000 to $2,000. The tax reform bill also introduces a new $500 credit for non-child dependents. The phase out income limit also increased from $110,000 for couples to $400,000 and from $75,000 for single filers to $200,000.  

ACA (Affordable Care Act) Mandate Repealed:
Beginning in 2019, individuals who choose to go without healthcare coverage for the year will not have to pay a tax penalty. 

Itemized Deductions: 

State and Local Taxes (SALT) Capped:
Taxpayers can deduct up to $10,000 in state and local income taxes. Previously there was no cap.

Mortgage Interest Deduction Drops:
Individuals who purchase a home in 2018 can only deduct interest up to $750,000 in mortgage debt (previously $1 million). The interest deduction on home-equity loans is eliminated unless it is uses to buy, build or improve the home that secures the loan. 

Miscellaneous Deduction:
Misc. deductions subject to the 2% of AGI are no longer deductible. Examples are unreimbursed employee business expenses, investment expenses and tax preparation fees. 



Business Deductions for S-Corp, Partnerships, Schedule C and E Filers:
These entities are entitled to take a deduction equal to 20% of the "qualified business income" earned from the business with certain limitations.

  • Qualified business income is best thought of as ordinary, non-investment income. Stated in another way, this is the revenue the business generated less applicable expenses. We ignore things like interest or dividend income or capital gains from the sale of property. 



Consumer Alerts on Tax Scams:
Note the IRS will never:
  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.


** TIPS FOR OUR CLIENTS FOR A SMOOTH FILING SEASON IN 2019 **

  • Upon receipt of your tax returns, please review the returns immediately to address any questions you may have. Please do not wait until April 10th to review your returns!!

  • Upon review of your returns, please mail/fax/email your e-File authorization form 8879 back to us as soon as possible to avoid the year-end rush. Remember you can file your returns before paying any balance due. The filing date and to pay any balance due for 2018 individual tax is April 15th.



TAX NEWS/TIPS FOR 2018