2018 New Tax Brackets

The new 2018 tax reform has brought us new tax brackets.

Singles
Rate Taxable Income Bracket
10% 0 to $9,525
12% $9,525 to $38,700
22% $38,700 to $82,500
24% $82,500 to $157,500
32% $157,500 to $200,000
35% $200,000 to $500,000
37% $500,000 and up

Married
Rate Taxable Income Bracket
10% 0 to $19,050
12% $19,050 to $77,400
22% $77,400 to $165,000
24% $165,000 to $315,000
32% $315,000 to $400,000
35% $400,000 to $600,000
37% $600,000 and up

Heads of household
Rate Taxable Income Bracket
10% 0 to $13,600
12% $13,600 to $51,800
22% $51,800 to $82,500
24% $82,500 to $157,500
32% $157,500 to $200,000
35% $200,000 to $500,000
37% $500,000 and up

2018 Filing Due Date (Tax Year 2017)

Form 2018 Filing Due Date (Tax Year 2017)
Est Estimated Taxes for 4th Qtr January 16, 2018
1040 Individual Tax Returns April 17, 2018
1041 Trusts and Estates April 17, 2018
1065 LLC and Partnerships March 15, 2018
1120 S S Corporations March 15, 2018
1120 C Corporations April 17, 2018
990 Tax Exempt Org May 15, 2018
W-2 Wage Reports January 31, 2018
1099  Information returns January 31, 2018
5500 Employee Benefit Plan July 31, 2018

 

Form Final 2018 Filing Due Date (Tax Year 2017)
1040 Individual Tax Returns October 15, 2018
1041 Trusts and Estates October 1, 2018
1065 LLC and Partnerships September 17, 2018
1120 S S Corporations September 17, 2018
1120 C Corporations October 15, 2018

4 Simple reasons to participate in your company’s 401K

1.  If your company matches a percentage to your 401K contribution, it is actually just like you got a raise. For example, if your company matches 3% of your salary to your  401K contribution, and lets say you make $40,000 a year, you are going to get an extra $1,200.

2.  Your contribution to your 401K plan is tax deferred. For example, if you contribute $2000 to your 401K, and your wages are at $40,000, you actually will only pay taxes on $38,000. You will save on paying the taxes on the $2,000 for now.

3.  Your contribution and the extra that your company matches grows in your plan and you will have an attractive amount of savings without really cramping your budget.

4.  You can borrow from your 401K plan when you need to, such as, for a down payment to buy a house.

11 most common write-offs and credits on your tax return

1.   Alimony payments

2.   Moving Expenses (If the move is job related)

3.    Contribution to IRA, Health Savings Accounts, 401K

4.   Dependent care credit for child care costs (if you work)

5.   Education costs (including tuition and fees)

6.    Student Loan Interest (up to $2500 per year)

7.   Ordinary losses on stocks

8.   Out of pocket expenses for voluntary charity work

9.   Mortgage interest (if itemize schedule A)

10. Real Estate Taxes (Schedule A)

11. State and Local income taxes (Schedule A)

Is my Scholarship taxable?

Scholarships  received by a student toward a degreed education is tax free for qualified expenses such as tuition, fees, books, supplies and equipment. The room and board and travelling expenses are taxable and should be included in the 1040 tax return.  The scholarships received for a non-degreed education is all taxable. For more information please refer to IRS publication 970.

I don’t have money to pay my taxes. Should I file my business tax return?

Yes, you are better off to file your business tax return on time even though you can’t pay your taxes due. You pay less in penalties if you file your taxes on time. The penalty of late filing will be added to the penalty of late payment of taxes and you end up paying more out of your pocket.

The pass-through companies such as LLC’s, S Corporations are penalized for late filing by IRS and if in California by the State.

The extension dead-line for the LLC and S Corporations is September 15th.

The extension dead-line for Individual tax return is October 15th.

 

Send your kids to day camp and save on taxes

The IRS allows the cost of day camp and babysitters for your kids to be deducted from your taxes. This saving is in the form of a tax credit and it allows you to use 35% of all eligible child care expenses up to  $6000 for two or more children. This credit is 35% of child care expenses up to $3000 for one child. Just save all your receipts and take them to your tax preparation service.

Remember your child has to be 13 or younger. Overnight camps expenses are not eligible for this credit. The cost of babysitters at home or a home facility is eligible too.

Enjoy the summer and let your kids enjoy themselves too.