Tax Changes You Need to Know for 2018

It’s that time of year again — time to start filing your taxes. While you’re gathering all

the necessary documents to take to your tax expert, there are a few changes you

should know during this tax season. Keep them in mind in order to make the most

of your money.

Retirement Contribution Limits

Employees who contribute to 401(k), 403(b), Thrift Savings, and most 457 plans

can now contribute as much as $18,500 as opposed to the $18,000 they previously could.

Deductible Contributions to IRAs

Those who contribute to individual retirement accounts will have higher income ranges

after adjustments are made for costs of living. The deduction will phase out for those covered

by workplace retirement plans.

-Single taxpayers will have a limit of $63,000-$73,000.

-Married couples’ limits will depend on employer coverage. When the investing spouse has access to an employer plan, the limit will be $101,000-$121,000. If a person doesn’t have access to an employer plan, but their spouse does, the phase-out will be at $189,000-$199,000.

-It’s important to note the phase-out will not affect married couples who file their taxes

separately and are covered by an employer plan, so their range is still $0-$10,000.

Top Income Tax Rates

A 39.6% tax rate will affect single taxpayers with incomes over $426,700 and joint filers

with incomes over $480,050.

Standard Deductions

-Married couples who file joint tax returns will have a standard deduction of $13,000, a

$300 increase.

-Single filers or married people who file separately will have a raised deduction of $6,500.

-Heads of the household will have a $9,550.

Personal Exemption

Personal exemptions will increase by $100-$4,150. The phase-out for single filers begins

at an income of $266,700 and ends at $389,200. For married, joint-filing couples, it begins

at $320,000 and ends at $442,500.

Estates Taxes

The basic exclusions amount will increase from $5.49 million to $5.6 million for decedents

who die is 2018.

At American Investment Planners LLC, we make it a priority to help you prepare for the

best financial future possible. From tax management to retirement plans, we’re here to

help with anything you may need. To schedule an appointment with one of our advisors,

please call (516) 932-5130 or email info@americaninvestmentplanners.com.