High Income TaxPayers
High-Income Taxpayers
Mid America Tax Planner
HTTPS://WWW.ACCOUNTING-USA.COM
Helping Start a Plan To Reduce Tax
Liability Up to 50% in next 30 days!
Ph: (913) 210-4765
High-Income Taxpayers
In addition to being subject to higher federal tax rates,taxpayers whose income exceeds certain levels have tax
deductions and credits that are reduced or eliminated.The provisions listed may have additional qualifications
and restrictions. Other provisions of the tax code, suchas fringe benefit limitations and taxation on the sale of a
principal residence, may further restrict a taxpayer’s abilityto take deductions or cause the taxpayer to pay additionaltax. Ask your tax professional for more details.
Capital Gain Tax Rates
Long-Term Capital Gain and
Qualified Dividend Income Maximum Tax Rates
Taxable income Max Rate
Taxable income Max Rate
Single
$0 to $38,600..............................0%
$38,601 to $425,800.................. 15%
$425,801 and over................... 20%
HOH
$0 to $51,700..............................0%
$51,701 to $452,400.................. 15%
$452,401 and over................... 20%
Estates and Trust
$0 to $2,600......................................................................................... 0%
$2,601 to $12,700................................................................................15%
$12,701 and over................................................................................20%
MFJ or QW
$0 to $77,200..............................0%
$77,201 to $479,000.................. 15%
$479,001 and over................... 20%
MFS
$0 to $38,600..............................0%
$38,601 to $239,500.................. 15%
$239,501 and over................... 20%
Itemized Deductions and Personal
Exemptions
Itemized deduction phaseout. Effective for 2018, the overall limitation on itemized deductions is suspended.
There is no limitation on deductions due to income.Taxes paid. Effective for 2018, the itemized deduction
for state and local taxes is limited to $10,000 ($5,000 MFS).Foreign real property taxes are no longer deductible.Home mortgage interest. Effective for 2018, a taxpayer
may treat no more than $750,000 as acquisition indebtedness ($375,000 MFS). The $1,000,000($500,000MFS)
limitation continues to apply for any indebtedness incurred prior to December 15, 2017.
The deduction for home equity indebtedness (other than acquisition debt) is no longer allowed.
Personal exemptions. Effective for 2018, the deduction
for personal exemptions is suspended
Individual Retirement
Arrangements (IRAs)
IRA Individual Contribution Limits
2018 2017
Under age 50................................ $ 5,500............................ $ 5,500
Age 50 or older............................. $ 6,500............................ $ 6,500
Traditional IRA Phaseout Based on Modified AGI (MAGI)
If an individual is an active participant in an employersponsored
pension plan, the deduction for a traditional
IRA contribution is phased out when MAGI is between
the following
Tax Year MFJ Single, HOH MFS
2018....... $ 101,000 to $ 121,000...... $ 63,000 to $ 73,000....... $ 0 to $ 10,000
2017....... $ 99,000 to $ 119,000...... $ 62,000 to $ 72,000....... $ 0 to $ 10,000
If the individual is not an active participant, but the spouse
is, the non-active participant’s deduction is phased out
when modified AGI is between the following
High-Income
Taxpayers
Tax Year MFJ MFS
2018....................$ 189,000 to $ 199,000............... $ 0 to $ 10,000
2017....................$ 186,000 to $ 196,000............... $ 0 to $ 10,000
Roth IRA Phaseouts
2018 2017
MFJ or QW........................ $ 189,000 to $ 199,000.......... $ 186,000 to $ 196,000
Single, HOH, or MFS*......... $ 120,000 to $ 135,000.......... $ 118,000 to $ 133,000
MFS............................................ $ 0 to $ 10,000................... $ 0 to $ 10,000
* MFS and did not live with spouse during the year.
Retirement Savings Contribution Credit
(Saver’s Credit)
2018 Retirement Savings Contribution Credit Percentage
Rate MFJ HOH Single, QW, MFS
50% $ 0 – $ 38,000 $ 0 – $ 28,500 $ 0 – $ 19,000
20% $ 38,001 – $ 41,000 $ 28,501 – $ 30,750 $ 19,001 – $ 20,500
10% $ 41,001 – $ 63,000 $ 30,751 – $ 47,250 $ 20,501 – $ 31,500
0% Over $ 63,000 Over $ 47,250 Over $ 31,500
Child Tax Credit
AGI phaseout. The credit (up to $2,000 per qualifying
child) is reduced by $50 for each $1,000 of modified AGI
above:
• $400,000 Married Filing Jointly.
• $200,000 Single, Head of Household, Qualifying
Widow(er), or Married Filing Separately.
Family Tax Credit
A nonrefundable credit of up to $500 is allowed for dependents
other than a qualifying child for the Child Tax
Credit.
Adoption Expenses
2018 maximum credit .................................................................. $ 13,810
2018 maximum exclusion............................................................. $ 13,810
AGI phaseout .......................................................... $ 207,140 – $ 247,140
Unused credit carryforward........................................................ 5 years
Medicare Provisions of the
Affordable Care Act
Increased Medicare Tax on Earned Income
The employee portion of the hospital insurance (Medicare)
tax is increased by an additional tax of 0.9% on wages
received in excess of the threshold amount. However,
unlike the general 1.45% hospital insurance (Medicare)
tax on wages, this additional tax is on the combined wages
of the employee and the employee’s spouse, in the
case of a joint return.
Medicare Tax on Unearned Income
Individuals. The tax is 3.8% of the lesser of net investment
income or the excess of modified adjusted gross
income over the threshold amount.
Threshold Amount
Joint return or surviving spouse................................................ $250,000
Married individual filing separately........................................... $125,000
All other tax filers...................................................................... $200,000
Education Benefits
2017 Education Benefits Comparison Chart
Benefit Annual Limit Modified AGI Phaseout
American
Opportunity /
Hope Credit
40% of the credit
may be refundable
(limited to $1,000).
$2,500
credit per
student.
$ 80,000 – $ 90,000
$ 160,000 – $ 180,000
(MFJ)
Lifetime
Learning Credit
Tax credit (nonrefundable).
$2,000
credit per tax
return.
$ 57,000 – $ 67,000
$ 114,000 – $ 134,000
(MFJ)
Coverdell
Education
Savings
Account (ESA)
Tax-free earnings. $2,000
contribution
per
beneficiary.
$ 95,000 – $ 110,000
$ 190,000 – $ 220,000
(MFJ)
U.S. Savings
Bond Interest
Exclusion
Tax-free interest. Amount of
qualified
education
expenses.
$ 79,550 – $ 94,550
$ 119,300 – $ 149,300
(MFJ)
Student
Loan Interest
Deduction
Above-the-line tax
deduction.
$2,500
deduction.
$ 65,000 – $ 80,000
$ 135,000 – $ 165,000
(MFJ)
Contact Us
There are many events that occur during the year that can affect
your tax situation. Preparation of your tax return involves summarizing
transactions and events that occurred during the prior
year. In most situations, treatment is firmly established at the
time the transaction occurs. However, negative tax effects can
be avoided by proper planning. Please contact us in advance
if you have questions about the tax effects of a transaction or
event, including the following:
• Pension or IRA distributions.
• Significant change in income or
deductions.
• Job change.
• Marriage.
• Attainment of age 59½ or 70½.
• Sale or purchase of a business.
• Sale or purchase of a residence
or other real estate.
• Retirement.
• Notice from IRS or other
revenue department.
• Divorce or separation.
• Self-employment.
• Charitable contributions
of property in excess of
$5,000.
High-Income Taxpayers
Mid America Tax Planner
HTTPS://WWW.ACCOUNTING-USA.COM
Helping Start a Plan To Reduce Tax
Liability Up to 50% in next 30 days!
Ph: (913) 210-4765
High-Income Taxpayers
In addition to being subject to higher federal tax rates,taxpayers whose income exceeds certain levels have tax
deductions and credits that are reduced or eliminated.The provisions listed may have additional qualifications
and restrictions. Other provisions of the tax code, suchas fringe benefit limitations and taxation on the sale of a
principal residence, may further restrict a taxpayer’s abilityto take deductions or cause the taxpayer to pay additionaltax. Ask your tax professional for more details.
Capital Gain Tax Rates
Long-Term Capital Gain and
Qualified Dividend Income Maximum Tax Rates
Taxable income Max Rate
Taxable income Max Rate
Single
$0 to $38,600..............................0%
$38,601 to $425,800.................. 15%
$425,801 and over................... 20%
HOH
$0 to $51,700..............................0%
$51,701 to $452,400.................. 15%
$452,401 and over................... 20%
Estates and Trust
$0 to $2,600......................................................................................... 0%
$2,601 to $12,700................................................................................15%
$12,701 and over................................................................................20%
MFJ or QW
$0 to $77,200..............................0%
$77,201 to $479,000.................. 15%
$479,001 and over................... 20%
MFS
$0 to $38,600..............................0%
$38,601 to $239,500.................. 15%
$239,501 and over................... 20%
Itemized Deductions and Personal
Exemptions
Itemized deduction phaseout. Effective for 2018, the overall limitation on itemized deductions is suspended.
There is no limitation on deductions due to income.Taxes paid. Effective for 2018, the itemized deduction
for state and local taxes is limited to $10,000 ($5,000 MFS).Foreign real property taxes are no longer deductible.Home mortgage interest. Effective for 2018, a taxpayer
may treat no more than $750,000 as acquisition indebtedness ($375,000 MFS). The $1,000,000($500,000MFS)
limitation continues to apply for any indebtedness incurred prior to December 15, 2017.
The deduction for home equity indebtedness (other than acquisition debt) is no longer allowed.
Personal exemptions. Effective for 2018, the deduction
for personal exemptions is suspended
Individual Retirement
Arrangements (IRAs)
IRA Individual Contribution Limits
2018 2017
Under age 50................................ $ 5,500............................ $ 5,500
Age 50 or older............................. $ 6,500............................ $ 6,500
Traditional IRA Phaseout Based on Modified AGI (MAGI)
If an individual is an active participant in an employersponsored
pension plan, the deduction for a traditional
IRA contribution is phased out when MAGI is between
the following
Tax Year MFJ Single, HOH MFS
2018....... $ 101,000 to $ 121,000...... $ 63,000 to $ 73,000....... $ 0 to $ 10,000
2017....... $ 99,000 to $ 119,000...... $ 62,000 to $ 72,000....... $ 0 to $ 10,000
If the individual is not an active participant, but the spouse
is, the non-active participant’s deduction is phased out
when modified AGI is between the following
High-Income
Taxpayers
Tax Year MFJ MFS
2018....................$ 189,000 to $ 199,000............... $ 0 to $ 10,000
2017....................$ 186,000 to $ 196,000............... $ 0 to $ 10,000
Roth IRA Phaseouts
2018 2017
MFJ or QW........................ $ 189,000 to $ 199,000.......... $ 186,000 to $ 196,000
Single, HOH, or MFS*......... $ 120,000 to $ 135,000.......... $ 118,000 to $ 133,000
MFS............................................ $ 0 to $ 10,000................... $ 0 to $ 10,000
* MFS and did not live with spouse during the year.
Retirement Savings Contribution Credit
(Saver’s Credit)
2018 Retirement Savings Contribution Credit Percentage
Rate MFJ HOH Single, QW, MFS
50% $ 0 – $ 38,000 $ 0 – $ 28,500 $ 0 – $ 19,000
20% $ 38,001 – $ 41,000 $ 28,501 – $ 30,750 $ 19,001 – $ 20,500
10% $ 41,001 – $ 63,000 $ 30,751 – $ 47,250 $ 20,501 – $ 31,500
0% Over $ 63,000 Over $ 47,250 Over $ 31,500
Child Tax Credit
AGI phaseout. The credit (up to $2,000 per qualifying
child) is reduced by $50 for each $1,000 of modified AGI
above:
• $400,000 Married Filing Jointly.
• $200,000 Single, Head of Household, Qualifying
Widow(er), or Married Filing Separately.
Family Tax Credit
A nonrefundable credit of up to $500 is allowed for dependents
other than a qualifying child for the Child Tax
Credit.
Adoption Expenses
2018 maximum credit .................................................................. $ 13,810
2018 maximum exclusion............................................................. $ 13,810
AGI phaseout .......................................................... $ 207,140 – $ 247,140
Unused credit carryforward........................................................ 5 years
Medicare Provisions of the
Affordable Care Act
Increased Medicare Tax on Earned Income
The employee portion of the hospital insurance (Medicare)
tax is increased by an additional tax of 0.9% on wages
received in excess of the threshold amount. However,
unlike the general 1.45% hospital insurance (Medicare)
tax on wages, this additional tax is on the combined wages
of the employee and the employee’s spouse, in the
case of a joint return.
Medicare Tax on Unearned Income
Individuals. The tax is 3.8% of the lesser of net investment
income or the excess of modified adjusted gross
income over the threshold amount.
Threshold Amount
Joint return or surviving spouse................................................ $250,000
Married individual filing separately........................................... $125,000
All other tax filers...................................................................... $200,000
Education Benefits
2017 Education Benefits Comparison Chart
Benefit Annual Limit Modified AGI Phaseout
American
Opportunity /
Hope Credit
40% of the credit
may be refundable
(limited to $1,000).
$2,500
credit per
student.
$ 80,000 – $ 90,000
$ 160,000 – $ 180,000
(MFJ)
Lifetime
Learning Credit
Tax credit (nonrefundable).
$2,000
credit per tax
return.
$ 57,000 – $ 67,000
$ 114,000 – $ 134,000
(MFJ)
Coverdell
Education
Savings
Account (ESA)
Tax-free earnings. $2,000
contribution
per
beneficiary.
$ 95,000 – $ 110,000
$ 190,000 – $ 220,000
(MFJ)
U.S. Savings
Bond Interest
Exclusion
Tax-free interest. Amount of
qualified
education
expenses.
$ 79,550 – $ 94,550
$ 119,300 – $ 149,300
(MFJ)
Student
Loan Interest
Deduction
Above-the-line tax
deduction.
$2,500
deduction.
$ 65,000 – $ 80,000
$ 135,000 – $ 165,000
(MFJ)
Contact Us
There are many events that occur during the year that can affect
your tax situation. Preparation of your tax return involves summarizing
transactions and events that occurred during the prior
year. In most situations, treatment is firmly established at the
time the transaction occurs. However, negative tax effects can
be avoided by proper planning. Please contact us in advance
if you have questions about the tax effects of a transaction or
event, including the following:
• Pension or IRA distributions.
• Significant change in income or
deductions.
• Job change.
• Marriage.
• Attainment of age 59½ or 70½.
• Sale or purchase of a business.
• Sale or purchase of a residence
or other real estate.
• Retirement.
• Notice from IRS or other
revenue department.
• Divorce or separation.
• Self-employment.
• Charitable contributions
of property in excess of
$5,000.