Whats New in 2018 that Affects You -TCJA

Rate

Single

Married filing jointly 

(and surviving spouses)

Heads of household

Married filing separately

10%

Up to $9,525

Up to $19,050

Up to $13,600

Up to $9,525

12%

$9,526–$38,700

$19,051–$77,400

$13,601–$51,800

$9,526–$38,700

22%

$38,701–$82,500

$77,401–$165,000

$51,801–$82,500

$38,701–$82,500

24%

$82,501–$157,500

$165,001–$315,000

$82,501–$157,500

$82,501–$157,500

32%

$157,501–$200,000

$315,001–$400,000

$157,501–$200,000

$157,501–$200,000

35%

$200,001–$500,000

$400,001–$600,000

$200,001–$500,000

$200,001–$300,000

37%

Over $500,000

Over $600,000

Over $500,000

Over $300,000

•         Maximize your retirement plan contributions to minimize income. For tax year 2018, the limit for 401(k)s (if you are under age 50) is $18,500. The limit is $24,500 if you are age 50 or older.

•         Take full advantage of employer-sponsored programs   that allow you to set aside pre-tax dollars for child care or medical expenses.

•          Ask your CPA whether you will likely be subject to the AMT and how to minimize the impact.

•          Shift to investments that are not subject to NIIT  (e.g., exempt bonds).

•          Offset any capital gains by harvesting losses in your taxable brokerage account.

Purchases of equipment

•      Bonus depreciation — A deduction of 100% of the cost     of qualified property can be deducted in the first     year of acquisition. In 2023, this percentage will decrease 20% until it becomes 0% in 2027.Used property is now included as qualified     property.

•      Section 179 — For tax year 2018, businesses can deduct   up to $1million of business property (computers, office furniture.) placed in service during the tax year. This deduction now includes the purchase of certain    improvements to commercial real property.

Deduction for business income

Some businesses will qualify for a 20% deduction of qualified

Business income

Health insurance

Evaluate your health insurance options to determine if you are eligible for a deduction for self-employed health insurance premiums (medical, dental or long-term care  plans).

Retirement plans

Consider establishing a qualified retirement plan, such as:

·         SEP IRA: May contribute up to the lesser of25% of net   income or $55,000

·         401(k):   Employee deferral plan, plus profit sharing

component

Meals and entertainment expenses

Expenses defined as entertainment are no longer deductible. However, business meals that meet certain criteria will still be deductible (generally 50% of the expense) as they have been in the past. Make sure that you have these items segregated in your books and records.