Tax Tips For Financials

 

► Tax Saving Techniques
Some generally recognized financial planning tools that may help you reduce your tax bill.

► Deducting Mortgage Interest
If you own a home, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your main home or a second home. The loan can be a first or second mortgage, a home improvement loan, or a home equity loan.

► Capital Gains and Losses
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.

► Coverdell Savings Accounts
A Coverdell Education Savings Account (ESA) is a savings account created as an incentive to help parents and students save for education expenses.

► IRA Contributions
If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for last tax year, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15 due date for filing your tax return for last year, not including extensions.

► ROTH IRA Contributions
Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules.

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Tax Tips For Businesses

 

► Domestic Production Deduction
If your business is engaged in a qualifying production activity you may be able to take a tax deduction for your U.S. based business activities.

► Organizational and Start Up Costs
Have you just started a new business? Did you know expenses incurred before a business begins operations are not allowed as current deductions?

► Business or Hobby?
It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take.

► Business Eligibility for Schedule C-EZ
Your business may have become eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your federal income tax return, according to the IRS.

► Deductible Home Offices
Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

► Filing Deadline and Payment Options
If you’re trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies from the IRS Forms page under Tax Tools on our website. If you find you need more time to finish your return, you can get a five or six month extension of time to file using Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. And if you have trouble paying your tax bill, the IRS has several payment options available.

► Refund, Where’s My Refund?
Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you filed a paper return even faster when you choose direct deposit.

► Your Appeal Rights
Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

► Information About IRS Notices
It’s a moment any taxpayer dreads. An envelope arrives from the IRS and it’s not a refund check. But don’t panic. Many IRS letters can be dealt with simply and painlessly.

► Charitable Contributions
When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations (up to 10% of taxable income) can add up to a nice tax deduction for your corporation.

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Tax Tips For Individuals

 

Storing Tax Records

 

Storing tax records: How long is long enough?

April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the “three-year law” and leads many people to believe they’re safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists.To be safe, use the following guidelines.

Business Documents To Keep For One Year

  • Correspondence with Customers and Vendors
  • Duplicate Deposit Slips
  • Purchase Orders (other than Purchasing Department copy)
  • Receiving Sheets
  • Requisitions
  • Stenographer’s Notebooks
  • Stockroom Withdrawal Forms

.

Business Documents To Keep For Three Years

  • Employee Personnel Records (after termination)
  • Employment Applications
  • Expired Insurance Policies
  • General Correspondence
  • Internal Audit Reports
  • Internal Reports
  • Petty Cash Vouchers
  • Physical Inventory Tags
  • Savings Bond Registration Records of Employees
  • Time Cards For Hourly Employees

.

Business Documents To Keep For Six Years

  • Accident Reports, Claims
  • Accounts Payable Ledgers and Schedules
  • Accounts Receivable Ledgers and Schedules
  • Bank Statements and Reconciliations
  • Cancelled Checks
  • Cancelled Stock and Bond Certificates
  • Employment Tax Records
  • Expense Analysis and Expense Distribution Schedules
  • Expired Contracts, Leases
  • Expired Option Records
  • Inventories of Products, Materials, Supplies
  • Invoices to Customers
  • Notes Receivable Ledgers, Schedules
  • Payroll Records and Summaries, including payment to pensioners
  • Plant Cost Ledgers
  • Purchasing Department Copies of Purchase Orders
  • Sales Records
  • Subsidiary Ledgers
  • Time Books
  • Travel and Entertainment Records
  • Vouchers for Payments to Vendors, Employees, etc.
  • Voucher Register, Schedules

.

Business Records To Keep Forever

While federal guidelines do not require you to keep tax records “forever,” in many cases there will be other reasons you’ll want to retain these documents indefinitely.

  • Audit Reports from CPAs/Accountants
  • Cancelled Checks for Important Payments (especially tax payments)
  • Cash Books, Charts of Accounts
  • Contracts, Leases Currently in Effect
  • Corporate Documents (incorporation, charter, by-laws, etc.)
  • Documents substantiating fixed asset additions
  • Deeds
  • Depreciation Schedules
  • Financial Statements (Year End)
  • General and Private Ledgers, Year End Trial Balances
  • Insurance Records, Current Accident Reports, Claims, Policies
  • Investment Trade Confirmations
  • IRS Revenue Agent Reports
  • Journals
  • Legal Records, Correspondence and Other Important Matters
  • Minutes Books of Directors and Stockholders
  • Mortgages, Bills of Sale
  • Property Appraisals by Outside Appraisers
  • Property Records
  • Retirement and Pension Records
  • Tax Returns and Worksheets
  • Trademark and Patent Registrations

.

Personal Documents To Keep For One Year

While it’s important to keep year-end mutual fund and IRA contribution statements forever, you don’t have to save monthly and quarterly statements once the year-end statement has arrived.

Personal Documents To Keep For Three Years

  • Credit Card Statements
  • Medical Bills (in case of insurance disputes)
  • Utility Records
  • Expired Insurance Policies

.

Personal Documents To Keep For Six Years

  • Supporting Documents For Tax Returns
  • Accident Reports and Claims
  • Medical Bills (if tax-related)
  • Sales Receipts
  • Wage Garnishments
  • Other Tax-Related Bills

.

Personal Records To Keep Forever

  • CPA Audit Reports
  • Legal Records
  • Important Correspondence
  • Income Tax Returns
  • Income Tax Payment Checks
  • Property Records / Improvement Receipts (or six years after property sold)
  • Investment Trade Confirmations
  • Retirement and Pension Records (Forms 5448, 1099-R and 8606 until all distributions are made from your IRA or other qualified plan)

.

Special Circumstances

  • Car Records (keep until the car is sold)
  • Credit Card Receipts (keep until verified on your statement)
  • Insurance Policies (keep for the life of the policy)
  • Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
  • Pay Stubs (keep until reconciled with your W-2)
  • Sales Receipts (keep for life of the warranty)
  • Stock and Bond Records (keep for 6 years beyond selling)
  • Warranties and Instructions (keep for the life of the product)
  • Other Bills (keep until payment is verified on the next bill)
  • Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)

 

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Due Dates

 

All due dates assume that the date falls on a business day. If the due date falls on a holiday or weekend, the due date will be the next business day.

January 10

Employees Who Work For Tips – If you received $20 or more in tips during December, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

January 15

Employers – Social Security, Medicare and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in December of this year.

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in December.

Individuals – Make a payment of your estimated tax for this year if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for this year’s estimated tax. However, you do not have to make this payment if you file this year’s return (Form 1040) and pay any tax due by January 31 of the following year.

Farmers and Fisherman – Pay your estimated tax for this year using Form 1040ES. You have until April 15 to file this year’s income tax return (Form 1040). If you don’t pay your estimated tax by January 15, you must file this year’s return and pay any tax due by March 1 to avoid an estimated tax penalty.

January 31

Individuals – File your income tax return (Form 1040) for this year if you did not pay your last installment of estimated tax by January 15. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of last installment.

Employers – Federal Unemployment Tax. File Form 940 (or 940-EZ) for this year. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you already deposited the tax for the year in full and on time, you have until February 10 to file the return.

Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of this year. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.

Employers – Non Payroll Taxes. File Form 945 to report income tax withheld for this year on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 12 to file the return.

Employers – Give your employees their copies of Form W-2 for the previous year. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee of the posting by January 31st.

Employers – Give annual information Forms 1098, 1099 and W-2G to recipients for certain payments made during the year.

Employers – File Form W-3 with Copy A of all Forms W-2 issued for the current tax year. File Form 1099-MISC with the IRS when you are reporting non-employee compensation payments in box 7.

February 10

Employees Who Work For Tips – If you received $20 or more in tips during January, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

February 15

Individuals – If you claimed exemption from income tax withholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 by this date to continue your exemption for another year.

Employers – Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in January.

Employers – Furnish Forms 1099-B, 1099-S and certain Forms 1099-MISC to recipients.

February 28

All Businesses – File information returns (Form 1099) for certain payments you made during previous year. These payments are described under January 31. There are different forms for different types of payments. Use a separate Form 1096 to summarize and transmit the forms for each type of payment. See the General Instructions for Forms 1099, 1098, 5498, and W-2G for information on what payments are covered, how much the payment must be before a return is required, which form to use, and extensions of time to file. If you file Forms 1098, 1099, or W-2G electronically (not by magnetic media), your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains January 31.

Employers – File Forms 1094-B, 1095-B, 1094-C, and 1095-C if filing on paper

March 1

Farmers and Fishermen – File Form 1040 and pay any tax due. However, you have until April 15 to file if you paid your previous year estimated tax by January 15 of the current year.

March 2

Employers – Give your employees Forms 1095-B and 1095-C for health care coverage.

March 10

Employees Who Work For Tips – If you received $20 or more in tips during February, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

March 15

Employers – Non payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in February.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in February.

S Corporations – File Form 1120S and pay any tax due. Provide each shareholder with a copy of Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Credits, Deductions, etc., or a substitute Schedule K-1. If you want an automatic 6-month extension of time to file the return, file Form 7004 and deposit what you estimate you owe.

S Corporation Election – File Form 2553, Election by a Small Business Corporation, to choose to be treated as an S Corporation beginning with current calendar year. If Form 2553 is filed late, S treatment will begin with next calendar year.

Partnerships – File a previous calendar year return (Form 1065). Provide each partner with a copy of Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1. If you want an automatic 6-month extension to file the return and provide Schedule K-1 or a substitute Schedule K-1, file Form 7004. Then file Form 1065 by September 15.

Electing Large Partnerships – File a previous calendar year return (Form 1065-B). Provide each partner with a copy of Schedule K-1 (Form 1065-B), Partner’s Share of Income (Loss) From an Electing Large Partnership. This due date is effective for the first March 15 following the close of the partnership’s tax year. If you want an automatic 6-month extension of time to file the return, file Form 7004. Then file Form 1065-B by September 15.

March 31

Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 1094-B, 1095-B, 1094-C, 1095-C, and W-2G File Forms 1097, 1098, 1099, 3921, 3922, 1094-B, 1095-B, 1094-C, 1095-C, or W-2G with the IRS. This due date applies only if you file electronically (not by magnetic media). Otherwise, see February 28. The due date for giving the recipient these forms will still be January 31. For information about filing Forms 1097, 1098, 1099, 3921, 3922, or W-2G electronically, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498 and W-2G Magnetically or Electronically.

April 10

Employees who work for tips – If you received $20 or more in tips during March, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

April 15

Individuals – File an income tax return (Form 1040, 1040A, 1040EZ, or 709) and pay any tax due. If you want an automatic 6-month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, or you can get an extension by phone if you pay part or all of your estimate of income tax due with a credit card. Then file Form 1040, 1040A, 1040EZ, or 709 by October 15.

Household employers – If you paid cash wages of $2,000 or more in the previous year to a household employee, file Schedule H (Form 1040) with your income tax return and report any employment taxes. Report any federal unemployment (FUTA) tax on Schedule H if you paid total cash wages of $1,000 or more in any calendar quarter of the previous 2 years to household employees. Also report any income tax you withheld for your household employees.

Individuals – If you are not paying your current year income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your current estimated tax. Use Form 1040-ES.

Employers – Social Security, Medicare and withheld income tax. If the monthly deposit rule applies, deposit the tax payments for March.

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in March.

Trusts and Estates – File a previous calendar year return (Form 1041). Provide each beneficiary with a copy of Schedule K-1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1. If you want an automatic 5 month extension to file the return and provide Schedule K-1 or a substitute Schedule K-1, file Form 7004. Then file Form 1041 by September 30.

Corporations – File Form 1120 or 1120-A and pay any tax due. If you want an automatic 6-month extension of time to file the return, file Form 7004 and deposit what you estimate you owe.

Corporations – Deposit the first installment of your estimated income tax for current year. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.

File FBAR Form 114 electronically with the Financial Crimes Enforcement Network (FinCEN).

April 30

Employers – Social Security, Medicare, and withheld income tax. File form 941 for the first quarter of current year. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until May 10 to file the return.

Employers – Federal Unemployment Tax. Deposit the tax owed through March if more than $500.

May 10

Employers – File Form 941 for the first quarter. This due date applies only if you deposited the tax for the quarter in full and on time.

Employees who work for tips – If you received $20 or more in tips during April, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

May 15

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in April.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in April.

Exempt Organizations – File a previous calendar year return (Form 990). If you want an automatic 6 month extension to file the return, file Form 8868. Then file Form 990 by November 15.

June 10

Employees who work for tips – If you received $20 or more in tips during May, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

June 15

Individuals – If you are a U.S. citizen or resident alien living and working (or on military duty) outside the United States and Puerto Rico, file Form 1040 and pay any tax, interest, and penalties due. Otherwise, see April 15. If you want additional time to file your return, file Form 4868 to obtain 4 additional months to file. Then file Form 1040 by October 15. However, if you are a participant in a combat zone you may be able to further extend the filing deadline.

Individuals – Make a payment of your current estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the second installment date for estimated tax in current year.

Corporations – Deposit the second installment of your estimated income tax. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in May.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in May.

July 10

Employees who work for tips – If you received $20 or more in tips during June, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

July 15

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in June.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in June.

July 31

Employers – Social Security, Medicare, and withheld income tax. File form 941 for the second quarter of the current year. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you have deposited the tax for the quarter in full and on time, you have until August 10 to file the return.

Employers – Federal Unemployment Tax. Deposit the tax owed through June if more than $500.

Employers – If you maintain an employee benefit plan, such as a pension, profit sharing, or stock bonus plan, file form 5500 or 5500-EZ for previous calendar year. If you use a fiscal year as your plan year, file the form by the last day of the seventh month after the plan year ends.

August 10

Employers – File Form 941 for the second quarter. This due date applies only if you deposited the tax for the quarter in full and on time.

Employees who work for tips – If you received $20 or more in tips during July, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

August 15

Employers – Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in July.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in July.

September 10

Employees who work for tips – If you received $20 or more in tips during August, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

September 15

Individuals – Make a payment of your current year estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment date for estimated tax in the current year.

Partnerships – File Form 1065. This due date applies only if you were given an additional 6-month extension. Provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute K-1.

Electing large partnerships – File Form 1065-B. This due date applies only if you were given an additional 6-month extension. See March 15 for the due date for furnishing the Schedules K-1 to the partners.

S Corporations – File Form 1120S and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension. Otherwise, see March 15. Provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1.

Corporations – Deposit the third installment of your estimated income tax. A worksheet, Form 1120-W, is available to help you make an estimate of your tax for the year.

Employers – Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in August.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in August.

September 30

Trusts and Estates – File Form 1041. This due date applies only if you were given an additional 5-month extension. Otherwise, see April 15.

October 11

Employees who work for tips – If you received $20 or more in tips during September, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

October 15

Individuals – If you have an automatic 6-month extension to file your income tax return, file Form 1040, 1040A, 1040EZ, FBAR Form 114, or 709 and pay any tax, interest, and penalties due.

Corporations – File Form 1120 or 1120-A and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension. Otherwise, see April 15.

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in September.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in September.

October 31

Employers – Social Security, Medicare, and withheld income tax. File form 941 for the third quarter of the current year. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until November 10 to file the return.

Employers – Federal Unemployment Tax. Deposit the tax owed through September if more than $500.

Employers – Income Tax Withholding. Ask employees whose withholding allowances will be different in the next calendar year to fill out a new Form W-4.

November 10

Employers – This due date applies only if you deposited the tax for the quarter in full and on time.

Employees who work for tips – If you received $20 or more in tips during October, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

November 15

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in October.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in October.

Exempt Organizations – File Form 990. This due date applies only if you timely requested an automatic 6-month extension. Otherwise, see May 15.

December 11

Employees who work for tips – If you received $20 or more in tips during November, report them to your employer. You can use Form 4070 Employee’s Report of Tips to Employer.

December 15

Corporations – Deposit the fourth installment of your estimated income tax. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.

Employers – Social Security, Medicare, and withheld income tax – If the monthly deposit rule applies, deposit the tax for payments in November.

Employers – Non Payroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in November.

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Tax Rates

2018 Tax Rates Schedule X – Single

If taxable income is over

But not over

The tax is

$0$9,52510% of the taxable amount
$9,525$38,700$952.50 plus 12% of the excess over $9,525
$38,700$82,500$4,453.50 plus 22% of the excess over $38,700
$82,500$157,500$14,089.50 plus 24% of the excess over $82,500
$157,500$200,000$32,089.50 plus 32% of the excess over $157,500
$200,000$500,000$45,689.50 plus 35% of the excess over $200,000
Over $500,000no limit$150,689.50 plus 37% of the excess over $500,000

2018 Tax Rates Schedule Y-1 – Married Filing Jointly or Qualifying Widow(er)

If taxable income is over

But not over

The tax is

$0$19,05010% of the taxable amount
$19,050$77,400$1,905 plus 12% of the excess over $19,050
$77,400$165,000$8,907 plus 22% of the excess over $77,400
$165,000$315,000$28,179 plus 24% of the excess over $165,000
$315,000$400,000$64,179 plus 32% of the excess over $315,000
$400,000$600,000$91,379 plus 35% of the excess over $400,000
$600,000no limit$161,379 plus 37% of the excess over $600,000

2018 Tax Rates Schedule Y-2 – Married Filing Separately

If taxable income is over

But not over

The tax is

$0$9,52510% of the taxable amount
$9,525$38,700$952.50 plus 12% of the excess over $9,525
$38,700$82,500$4,453.50 plus 22% of the excess over $38,700
$82,500$157,500$14,089.50 plus 24% of the excess over $82,500
$157,500$200,000$32,089.50 plus 32% of the excess over $157,500
$200,000$300,000$45,689.50 plus 35% of the excess over $200,000
Over $300,000no limit$80,689.50 plus 37% of the excess over $300,000

2018 Tax Rates Schedule Z – Head of Household

If taxable income is over

But not over

The tax is

$0$13,60010% of the taxable amount
$13,600$51,800$1,360 plus 12% of the excess over $13,600
$51,800$82,500$5,944 plus 22% of the excess over $51,800
$82,500$157,500$12,698 plus 24% of the excess over $82,500
$157,500$200,000$30,698 plus 32% of the excess over $157,500
$200,000$500,000$44,298 plus 35% of the excess over $200,000
$500,000no limit$149,298 plus 37% of the excess over $500,000

2018 Tax Rates Estates & Trusts

If taxable income is over

But not over

The tax is

$0$2,55010% of the taxable income
$2,550$9,150$255 plus 24% of the excess over $2,550
$9,150$12,500$1,839 plus 35% of the excess over $9,150
$12,500no limit$3,011.50 plus 37% of the excess over $12,500

Social Security 2018 Tax Rates

Base Salary$128,700
Social Security Tax Rate6.2%
Maximum Social Security Tax$7,979.40
Medicare Base Salaryunlimited
Medicare Tax Rate1.45%

Additional Medicare 2018 Tax Rates

Additional Medicare Tax0.9%
Filing statusCompensation over
Married filing jointly$250,000
Married filing separate$125,000
Single$200,000
Head of household (with qualifying person)$200,000
Qualifying widow(er) with dependent child$200,000

Education 2018 Credit and Deduction Limits

American Opportunity Tax Credit (Hope)$2,500
Lifetime Learning Credit$2,000
Student Loan Interest Deduction$2,500
Coverdell Education Savings Contribution$2,000

Miscellaneous 2018 Tax Rates

Standard Deduction: 
  • Married filing jointly or Qualifying Widow(er)
$24,000
  • Head of household
$18,000
  • Sinlge or Married filling separately
$12,000
Business Equipment Expense Deduction$1,000,000
Prior-year safe harbor for estimated taxes of higher-income110% of your 2017 tax liability
Standard mileage rate for business driving54.5 cents
Standard mileage rate for medical/moving driving18 cents
Standard mileage rate for charitable driving14 cents
Child Tax Credit$2,000 per qualifying child
Maximum capital gains tax rate for taxpayers with adjusted net capital gain up to $77,200 for joint filers and surviving spouses, $51,700 for heads of household, $38,600 for single filers, $38,600 for married taxpayers filing separately, and $2,600 for estates and trusts0%
Maximum capital gains tax rate for taxpayers with adjusted net capital gain over the amount subject to the 0% rate, and up to $479,000 for joint filers and surviving spouses, $452,400 for heads of household, $425,800 for single filers, $239,500 for married taxpayers filing separately, and $12,700 for estates and trusts15%
Maximum capital gains tax rate for taxpayers with adjusted net capital gain over $479,000 for joint filers and surviving spouses, $452,400 for heads of household, $425,800 for single filers, $239,500 for married taxpayers filing separately, and $12,700 for estates and trusts20%
Capital gains tax rate for unrecaptured Sec. 1250 gains25%
Capital gains tax rate on collectibles and qualified small business stock28%
Maximum contribution for Traditional/Roth IRA$5,500 if under age 50
$6,500 if 50 or older
Maximum employee contribution to SIMPLE IRA$12,500 if under age 50
$15,500 if 50 or older
Maximum Contribution to SEP IRA25% of compensation up to $55,000
401(k) maximum employee contribution limit$18,500 if under age 50
$24,000 if 50 or older
Self-employed health insurance deduction100%
Estate tax exemption$11,200,000
Annual Exclusion for Gifts$15,000
Foreign Earned Income Exclusion$104,100

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