finance


  • Changes to the Federal Tax Brackets & Law for the 2018 tax year?

    In the ridiculously large and wordy tax code each and every year small changes are made, but the average taxpayer is not affected by most of them. Despite of the fact, definitely there are some that has their effects even on average taxpayer, so I went to search out that what are those changes.

    So below I have written in detail whatever I found:

    There is a Change in the Income Tax Brackets.

    For Singles:

    10% Income Tax Bracket – From $0 to $8,350
    15% Income Tax Bracket – From $8,350 to $33,950
    25% Income Tax Bracket – From $33,950 to $82,250
    28% Income Tax Bracket – From $82,250 to $171,550
    33% Income Tax Bracket – From $171,550 to $372,950
    35% Income Tax Bracket – From $372,950 and onwards

    For Married Filing Jointly:

    10% Income Tax Bracket – From $0 to $16,700
    15% Income Tax Bracket – From $16,700 to $67,900
    25% Income Tax Bracket – From $67,900 to $137,050
    28% Income Tax Bracket – From $137,050 to $208,850
    33% Income Tax Bracket – From $208,850 to $372,950
    35% Income Tax Bracket – From $372,950 and onwards
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    For Married Filing Separately:

    10% Income Tax Bracket – From $0 to $8,350
    15% Income Tax Bracket – From $8,350 to $33,950
    25% Income Tax Bracket – From $33,950 to $68,525
    28% Income Tax Bracket – From $68,525 to $104,425
    33% Income Tax Bracket – From $104,425 to $186,475
    35% Income Tax Bracket – From $186,475 and onwards
    For Head of Household:

    10% Income Tax Bracket – From $0 to $11,950
    15% Income Tax Bracket – From $11,950 to $45,500
    25% Income Tax Bracket – From $45,500 to $117,450
    28% Income Tax Bracket – From $117,450 to $190,200
    33% Income Tax Bracket – From $190,200 to $372,950
    35% Income Tax Bracket – From $372,950 and onwards
    The Standard Deduction Has Gone Up.

    For single filers the standard deduction went up to $5,700. Last year this was $5,450.
    The standard deduction for joint filers will be $11,400, which was last year $10,900.
    The Amount You Can Save In Your 401K Retirement Account Has Gone Up.

    If you are under 50 then now each year you are able to contribute $16,500.
    If you are over 50 then now each year the contribution made by you could be $22,000.
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    The Amount You Can Save In Your Traditional or Roth IRA Account.

    If you are under 50 then now each year can now contribute $5,000.
    If you are over 50 then now you are able to contribute $6,000 each year.
    There is a Decrease in the Mileage Deduction.

    For business travel in the year 2008 you were able to deduct $.585 per mile, but in 2009 there has been a drop in the deduction up to $.55 per mile. If you take this deduction you just have to make sure that you are actually traveling for business.
    There has been an Increase in Gift Tax Exclusion.

    This year the gift tax exclusion is $13,000 which has been increased from previous year, as in 2008 it was $12,000. What it means is that now you can give up to $13,000 tax free to anyone else, up to a maximum of $1 million in your life. I wish I could give away that kind of money…
    The Earned Income Tax Credit Went Up.

    This year the maximum tax credit for low and moderate income workers and families with two or more children is $5,028, which has increased from $4,824 in 2017. On this credit income limit is now $43,415 for 2009, which has been increased from $41,646 last year.…