2018 TAX SUMMARY -- by Harry W. Laughlin III



JOINT STATUSIf taxable income is:The tax is: Not Over $19,05010% 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 STATUSIf taxable income is:The tax is:Not Over $13,35010% 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 STATUSIf taxable income is:The tax is:Up to $9,525:10% of taxable incomeUp 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 STATUSIf taxable income is:The tax is:Up to 13,600 Over $13,600 but not over $51,85010% 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 TRUSTSIf taxable income is:The tax is:Up to 2,550 10% of taxable incomeOver $2,550 but not over $9,150$255 plus 24% of the excess over $2,555Over $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.FILING STATUS (single, joint, etc.) controls tax rates, Standard Deductions and many other tax items.IRA CONTRIBUTION: $5,500; $1,000 catch up contribution for age 50+.401K CONTRIBUTION: $18,000; $6,000 catch up contribution for age 50+.STANDARD DEDUCTIONS in 2018 (if not deducting itemized deductions) are:Joint filers $24,000Heads of household $18,000Singles $12,000Marrieds filing separately $12,000Born after 1/1/53 or blind add $1,250+unmarried and not surviving spouse$1,550ITEMIZED DEDUCTIONS in 2018 are no longer reduced for higher income taxpayers.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.State and local taxes. Taxpayer can deduct up to $10,000 in combined state and local income, sales or property taxesMortgage 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 improvementCharitable deductions. No new limits on contributions.Miscellaneous Deductions are no longer deductible. These include employee job related expenses and investment related expenses like investment adviser’s fees. CHILDREN: Personal Exemptions are no longer deductible, but the Child Tax Credit expands 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). OTHER TAXESCapital 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 the 37% bracket. 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.Self-Employment Tax:: added to regular taxes is a 15.3% tax on self-employment earnings. 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. 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.20% DEDUCTION ON PASS-THROUGHS like partnerships, S corporations, or sole proprietorships. Owners of these can deduct up to 20% of profits from taxable income, with numerous exceptions and phase outs as income exceeds$157,500 ($315,000 for a joint return). ................
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