2nd payment of your Property Taxes – Due on or before 4/10/2018

Pay your property taxes on or before April 10 to avoid any penalties. The penalties are 10% of the taxes due if paid after the due date and the penalties increase as the unpaid balance becomes older.  These taxes can be paid on-line by going to the county tax collector site of where your property is located. The taxes can also be paid thru the mail and no penalties will occur if the payment is postmarked on or before the dead-line.

How new tax laws can affect your education plans

When the talk of tax reform first began last year, there was a lot of theory about the implications for educational loans and debt. Because students seeking loans, and those already paying on student loans worried that the changes would mean money out of their pockets.

Here is what is left intact:

  • American Opportunities Credit (AOC), a credit of up to $2,500 per eligible student.
  • Lifelong Learner credit, a credit of up to $2,000 for qualified education expenses.
  • Student loan interest deduction.  The student loan interest deduction of up to $2,500 stays intact. This benefit still gets phased out the more you earn. E.g. single tax filers earning more than $80,000 and couples earning over $165,000 no longer qualify for this deduction.
  • Employer tuition assisted remains nontaxable. Employers can contribute up to $5,250 a year to your qualifying continuing education.

Changes related to the Section 529 accounts:

Use of Section 529 accounts is expanded. Per US Security and Exchange Commission, A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Contributions to a 529 plan aren’t deductible, but amounts deposited in the plan can grow tax free until distributed

Starting in 2018

  • “Qualifying distributions” will include tuition at public, private or religious schools.
  • In addition to college tuition, section 529 also applies to elementary or secondary schools.
  • Section 529 will be limited to $10,000 per student during any taxable year

The new legislation only affects the federal tax treatment.  Each state is to review the impact to determine if they will adopt a similar approach at a state income tax level.

There is a $2,000 annual contribution limit to Coverdell Education Savings Accounts (Contributions to a Coverdell ESA aren’t deductible, but amounts deposited in the account can grow tax free until distributed).  The ability to contribute is phased out when income exceeds the phaseout limit.

Note: For people who are just starting to get educational funding in 2018, it will be important to understand the different types of student loans available and what the tax consequences will be when 2018 taxes get filed.  Obtaining all of the information you can and planning accordingly will give you the best tool to minimize the tax impacts and alleviate any unintentional impact to your credit score. To leave yourself in the best shape in terms of both taxes and credit, plan for your tax liability and use different strategies to repay your student loans.

2018 New Tax Brackets

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

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

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

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)

Four facts on hiring tax credits for a qualified veteran

1. The credit is against employer’s share of social security tax.

2. The credit can be as high as $9600 per qualified veteran.

3. The amount of credit depends on how long the veteran had been unemployed before hiring, number of hours working and his first year       wages.

4.  Employer has to fill out form 8850 for Pre-Screening Notice and Certification Request to secure a certification 28 days after hiring the eligible veteran.