IRS Inflation Adjustments

IRS Inflation Adjustments

 

By now you probably have filed your tax return or extended and 2018 taxes are probably not top of mind. Between the Tax Cuts and Jobs Act and inflation adjustments there are plenty of things that are important to know and talk about with your tax advisor.

The items changing due to the Tax Cuts and Jobs Act that have more of an impact are:

  • The standard deduction is rising to $12,000 for single and married filing separately, $18,000 for head of household, and $24,000 for married filing jointly.
  • The personal exemption drops to $0.
  • New tax rates:
    Individuals Married Filing Jointly Ordinary Rate
    $0 – $9,525 $0 – $19,050 10%
    $9,526 – $38,700 $19,051 – $77,400 12%
    38,701 – $82,500 $77,401 – $165,000  22%
    $82,501 – $157,500 $165,001 – $315,000 24%
    $157,501 – $200,000 $315,001 – $400,000 32%
    $200,001 – $500,000 $400,001 – $600,000 35%
    over $500,000 over $600,000 37%

Some items for 2018 are changing due to inflation and are not affected by the bill, such as:

  • The annual exclusion for gifts will be 15,000 in 2018.
  • The monthly limitation for qualified transportation fringe benefit and for qualified parking is $260.
  • The 2018 dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

This information from IR-2018-94 could prove useful in planning for 2018 taxes. If you have questions or are curious how these changes could impact you, talk to your tax advisor or reach out to Elias Strauss CPAs, LLC and we would love to be a resource to you.

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