| Dale K. Cline, CPA, PLLC
CERTIFIED PUBLIC ACCOUNTANT
P.O. Box 3966
Suite 101, 1333 2nd St. N.E.
Hickory, NC 28603-3966
TAX INFORMATION FOR INDIVIDUALS
This is a list of selective individual tax items and should not be relied upon without a professional analysis of how any of these items may apply to a specific situation.
EMPLOYEES AND SELF-EMPLOYED individuals will pay the same rate of FICA tax in 2017 and 2018. Social Security rate is 6.2% on the wage base of $127,200/$128,400 respectively. Medicare tax rate is 1.45% on all compensation. Self-employed individuals pay 12.4% on their earnings at the same base indicated for employees and 2.9% on all earnings. An additional .9% Medicare tax rate applies to higher income individuals exceeding applicable threshold amounts.
INDIVIDUALS WITHOUT QUALIFIED HEALTH CARE COVERAGE may still face the (SR Tax) "Shared Responsibility Tax" thru 2018 unless you qualify for exemptions.
THE 3.8% MEDICARE CONTRIBUTION/SURTAX began in 2013 on net investment income of individuals, estates & trusts above certain thresholds of modified adjusted gross income.
DONATIONS TO CHARITABLE ORGANIZATIONS must be properly substantiated to assure your deduction. Proper documentation for various amounts has to be received by the time you file your return.
IRA's AND OTHER PLAN CONTRIBUTIONS: (certain limitations apply)
• Contribution/deduction limits for IRAs and Roths $5,500 for 2017 and 2018. Age 50+ may do additional $1,000 and has to be made by April 15, 2018. You cannot make a contribution to an IRA if you are over 70 ½ but you might qualify to contribute to a non-deductible Roth.
• Maximum elective deferral for 401K contribution is $18,000 for 2017/$18,500 for 2018. Age 50+ may contribute an additional $6,000 for 2017 and 2018.
• RMD - 70 ½ year old must take the Required Minimum Distribution from IRAs by April 1st of the year following the year in which you reached age 70 ½. The RMD for any year after the year you reach 70 ½ must be made by Dec. 31 of that later year. (You can avoid 2 RMDs in same year.)
HSA CONTRIBUTION rates for 2017 are $3,400/$3,450 for 2018 for Individuals and $6,750/$6,900 for Family Coverage. Age 55 and older can add $1,000.
FEDERAL LONG TERM CAPITAL GAIN rates are either 0%-15%; for higher-income individuals the rate could be 20%, or 23.8% because of the Net Investment Income surtax.
UP TO 85% of your Social Security Benefits may be includible in taxable income if your income exceeds certain levels. North Carolina excludes the benefits from taxation.
AMT (Alternative Minimum Tax) PATCH is permanent beginning after 2011 and is indexed for inflation each year.
STUDENT LOAN INTEREST deduction of up to $2,500 is available for 2017 and is phased out, when income exceeds certain levels.
QUALIFIED "MOVING EXPENSES" deduction has been replealed in the "New Tax Law".
AMERICAN OPPORTUNITY CREDIT of up to $2,500, and LIFE TIME LEARNING CREDIT of up to $2,000 is available, with phase outs, for 2017.
CHILD TAX CREDIT is $1,000 maximum per qualifying child for 2017 and $2,000 for 2018. Income phase-out thresholds apply.
TEACHERS $250 deduction was extended and will be indexed for inflation going forward.
THE GIFT TAX annual exclusion is $14,000/$28,000 for 2017 and $15,000/$30,000 for 2018. Tuition and medicals paid directly to providers by the donor are exempt.
UNIFIED GIFT/ESTATE TAX 2017 Exclusion amount is $5.490 million for 2017 and $11.2 million for 2018. Top transfer rate is 40%.
STANDARD BUSINESS MILEAGE RATE for 2017/2018 is $.535/$.545; medical rate is $.17/$.18, and charitable rate remains at $.14.
FOREIGN FINANCIAL ASSETS (FBAR) - individuals are required to include new disclosures about Foreign Financial Assets with their tax returns for tax years beginning after March 18, 2010. Stiff penalties apply for non-compliance.
N.C. INDIVIDUAL INCOME TAX RATE FOR 2017 AND 2018 IS 5.499%.
(ABLE) "Achieving A Better Life Experience" accounts can be created by disabled individuals or families to support their disabled dependents after December 31, 2014. Contributions are not deductible; earnings are tax free as long as withdrawals are used for qualified disability expenses. Enhancements are in the New Tax Law for 2018.
HOME MORTGAGE INTEREST DEDUCTION doubled for unmarried co-owners from a maximum of $1.1 million to maximum of $2.2 million per a reversed Tax Court decision in August, 2015. The New Tax Law made changes for 2018.
NC DISALLOWS a deduction for qualified tuition and related expenses after 2014.
NANNY TAX threshold is $2,000/2017 and $2,100 for 2018.
KIDDIE TAX First $1,050 of unearned income is -0- tax, next $1,050 is taxed at Child's Marginal rate, amounts over $2,100 is taxed at parents marginal rate. "New Tax Law" has modified this for 2018.
Please be aware that tax provisions continually change and you should seek professional guidance in applying any tax provision to a specific situation.
This selective information is not intended as a formal tax opinion and should not be relied upon without an independent, professional analysis of the facts and law applicable to any information contained herein.
CAUTION: The new "Tax Cuts and Jobs Act of 2017" is generally effective starting in 2018 and impacts every individual and business taxpayer. We encourage you to contact us before implementing any tax planning strategies for 2018.
© 2010 Dale K. Cline, CPA, PLLC All Rights Reserved
Updated February 19, 2018