Ten Big Changes for the 2018 Taxes

While you’re getting ready for the holidays, RBI’s Chris Smith is getting ready for tax season! He’s sharpening all of his pencils, and instead of sugarplums, he’s dreaming of W2 forms and 1099s.

We’re so glad that Chris is always on top of what you need to know to prepare your taxes, whether it is for your personal finances or for your business. Here is Chris’ list of the ten big changes for the 2018 taxes.

  1. Standard deductions went way up.  Married filing jointly went to $24,000, up from what would have been $13,000.
  2. Personal exemptions have been eliminated.
  3. There are new tax brackets…the 15% bracket is now 12%, and the 25% is now 22%
  4. Estate tax exemption doubled – continuation of the road to eliminate the death tax.
  5. The child tax credit has been raised to $2,000 per qualifying child, those who are under 17, up from $1,000. A $500 credit is available for dependents who do not get the $2,000 credit.
  6. The deduction for interest is capped at $750,000 for mortgage loan balances taken out after December 15th of last year. The limit is still $1 million for mortgages that were established prior to December 15th, 2017.
  7. The itemized deduction is limited to $10,000 for both income and property taxes paid during the year.
  8. The employee limit for 401K and 403b plans went up $500 to 18,500.
  9. Phaseout limits were raised for those who have workplace savings plans and choose to not use or to do extra on the side.
  10. Phaseout limit for ROTH IRA’s has gone up.

So if you’ve read the list about, and any of these changes make you go, “Huh?” or cause you to lose sleep at night, please contact Chris and schedule some time to talk. He understands that as a small business owner or nonprofit president, you didn’t go into business for the financial work involved…He says, “We handle the financial stuff that overwhelms owners.” Chris also shares this advice to help out with your personal taxes. Sure, Chris looks out for small businesses and nonprofits too, but wouldn’t it be great to spend less time on your personal taxes so you can spend time on the things that matter, too?

That’s a gift you should give yourself for Christmas for a less stressful 2019!

New Tax Law for 2018 to Negatively Affect Homeowners

The new Tax law for 2018 that will affect millions of Americans when the new filing season comes around. Many individuals love to use home ownership as an extra way to save money on their taxes. After all, this is a major incentive for people to purchase homes in the first place, to save money.  These changes are being brought about by longstanding provisions from direct and indirect tweaks that have allowed individuals to deduct home-mortgage interest on Schedule A.

With these new changes in place, the 32 million tax filers who received a write off on their home will fall to approximately 14 million. Not only will this stop a tax break, this will cause a rift in savings. These new changes have begun to stir the question of what is the best thing to do with your home financially if you can’t pay it off? Many are beginning to advocate for paying off the mortgage as soon as possible. This mentality of paying off a mortgage can help compensate for the lack of a tax break, as well as rising mortgage interest costs. Many married couples will feel the blunt of this new law due to limitations on number of returns received, not person in a house hold. There is a cap on deducting more than $10,000 of state and local income or sales and property taxes (SALT). If a married couple is filing jointly, this is the limit they must stick to when filing. During the 2017 filing season, a couple only needed write off’s totaling over $12,700 to receive the benefits of listing deductions on Schedule A.

For 2018 couples will have to claim one $24,000, nearing doubling the amount from the previous year. These new limitations are causing stress and concern for individuals worrying about their taxes.

Contact us through www.rbisvcs.com to talk to us about this and other tax changes, so we can make sure your 2018 filing is as smooth as possible.