Suffice it to say, 2018 might become in interestingly confusing tax year, as the federal government is presently looking at making a lot of changes… if Congress ends up passing most of it. With that said, there’s a lot of tax information we presently have that’s going into effect at the beginning of the year. Our disclaimer is that some of these things might change during 2018, including health care taxes. The best we can do is share with you some of what we know right now.
For instance, the highest tax rate for those making more than $480,050 a year is currently 39.6%. That rate remains steady, but it’s possible with the new bill that it’ll come down. The flat tax rate is $134,244, which means if you make a million dollars in one year you’ll be paying around $340K to the federal government.
For everyone else, the IRS tax rates are thus:
Income
$0 – $19,050 *** 10% of taxable income
$19,051 – $77,400 *** $1,905+15% of amount over $19,050
$77,401 – $156,150 *** $10,657+25% of amount over $77,400
$156,151 – $237,950 *** $30,345+28% of amount over $156,150
$237,951 – $424,950 *** $53,249+33% of amount over $277,950
$424,951 – 480,050 *** $114,959+35% of amount over $424,950
The standard deduction for single and married couples filing separately has gone up to $6,500 in 2018, an increase of $150. For married couples filing jointly, the amount has increased $300 and is now $13,000. The standard deduction for heads of households has gone up $150 and is now $9,550. The standard deduction for a taxpayer (child working a part time job, etc) who can be claimed as a dependent by another taxpayer can’t exceed the greater of (a) $1,050 or (b) $350 plus the dependent’s earned income.
A few quick hitters:
* The maximum Earned Income Tax Credit available is $6,444 for taxpayers filing jointly who claim 3 or more children.
* The value used to determine the amount of Child & Dependent Care Credit that may be refundable is $3,000.
* The maximum amount you can take for a deduction for student loan interest is still $2,500.
