Federal Tax Updates
Here’s what’s new for 2018:
- Alternative Minimum Tax (AMT) exemption amounts increased:
- IRA deduction expanded — You might be able to claim a deduction if both of these apply:
- You were covered by a retirement plan.
- Your income was less than $71,000 — or $118,000 for married filing jointly or qualifying widow(er)
If your spouse was covered by a retirement plan but you weren’t, you might be able to claim a deduction. Your income has to be less than $193,000 to claim a deduction in this case.
- Current standard mileage rates:
- $0.545 a mile for business use of a vehicle
- 23.5 cents a mile for medical care
- Earned Income Credit (EIC) maximum income changes are:
- Three or more children lived with you and you earned less than $47,747 — or $53,267 if married filing jointly
- Two children lived with you and you earned less than $45,802 — or $49,974 if married filing jointly
- One child lived with you and you earned less than $40,320 — or $44,651 if married filing jointly
- No children lived with you and you earned less than $15,270 — or $20,330 if married filing jointly
- The maximum investment income you can earn and still get the EIC increased to $3,500.
- Elective salary deferrals:
- No exceptions — maximum amount is $18,000
- SIMPLE plans only — maximum amount is $12,500
- 403(b) plans and qualify for the 15-year rule — maximum amount is $21,000
- Catch-up contributions for taxpayers age 50 or over has increased to $6,000. Exceptions include for Section 401(k)(11) and SIMPLE plans
What happens if you overpay your taxes? Learn more about overpaying your taxes and your options with the experts at H&R Block.
Do you need help determining when to file Form 1041 for an estate? Learn more from the tax experts at H&R Block.
Taking money out of your retirement plan? Review the rules for rollovers and early distribution penalty exceptions with the team at H&R Block.
Deducting property expenses under Section 179 after Tax Reform? Learn why tax reform means new deduction rules for business owners and how the changes may affect you.