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Tax Changes You Need to Know

By Brandon Loveridge

2018 is off to a fast start. BPC is coming off a record year in terms of number of accounts, employee headcount and inspections completed. This year should be a strong one for the economy also. Tax reform has lowered tax rates for both employers and individuals, which economists predict will increase the rate of GDP growth for the US economy. Here is a rundown of a few of the changes that will affect BPC employees – from both tax reform and the annual adjustments from the IRS.

  • Federal income tax rate for married taxpayers earning from $18K-$76K has decreased from 15% to 12%.
  • The rate for those earning $76K-$153K has decreased from 25% to 22%.
  • The child tax credit has increased from $1,000 to $2,000.
  • Interest is no longer deductible on home-equity loans.
  • Social Security cost-of-living adjustment will increase by 2%.
  • The earnings limit for workers who are younger than “full” retirement age (age 66 for people born in 1943 through 1954) will increase to $17,040. ($1 deducted from benefits for each $2 earned over $17,040.)
  • The earnings limit for people turning 66 in 2018 will increase to $45,360. ($1 deducted from benefits for each $3 earned over $45,360 until the month the worker turns age 66.)
  • The maximum amount of earnings subject to the Social Security tax will increase to $128,400.
  • The annual 401(k) limit increases from $18,000 to $18,500. For savers over 50, the limit is $24,500.
  • The 2018 annual contribution limit that individuals with single medical coverage can contribute to a health saving account is $3,450, an increase of $50 from 2017. The annual HSA contribution limit is $6,900 for those covered under qualifying family medical plans (up from $6,750 in 2017). But if you’re 55 or older in 2018, you can contribute an additional $1,000, or total of $4,450 to an HSA for singles and $7,900 for families per year.
  • The Flexible Savings Account limit will increase from $2,600 to $2,650.

With all the changes going into effect, you may find it worthwhile to consult with a CPA or Certified Financial Planner if you have not yet retained one. To find a licensed professional in your area, go to

www.aicpa.org/forthepublic/findacpa.html

or

http://ow.ly/wMC130inA5f

 

 

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