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2810 Fieldstream Drive North
Wilson, NC 27896
Phone: 252-237-4357
Fax: 252-243-2681
July/August 2018
Midyear Tax Checkup
The halfway point of 2018 is a good time to examine how the Tax Cuts and Jobs Act of 2017 affects you. That way you can be better prepared come tax season. Here are some changes you might want to note:
Cap Gains Brackets Change
While the existing three capital gains tax rates remain the same, the income brackets (see below) on which capital gains and qualified dividends are levied were uncoupled from ordinary income tax rates and indexed to inflation.Joint Filers
- 0% - $77,200
- 15% - $77,201 - $$479,000
- 20% - $479,001 and up
Single Filers
- 0% - $38,600
- 15% - $38,601 - $$425,800
- 20% - $425,801 and up
Long-term capital gains taxes are levied on investments held at least one year and one day. Shorter-term investment gains are still taxed at ordinary income tax rates.
Income Tax Brackets
You likely know by looking at your paycheck that federal income taxes have also changed. If you're like many taxpayers, you have seen an increase in your take-home pay. Talk to your employer to make sure your company is withholding the right amount of taxes from your pay. If your employer takes out too much, you'll get it back as a refund after filing your 2018 taxes. But why leave the money with the IRS earning zero interest?Likewise, make sure your employer deducts enough to cover your 2018 federal tax bill. Also know that even if the correct amount of money is withheld for taxes on income from your employer, other tax considerations such as untaxed freelance income earned elsewhere might prompt you to work with your employer to deduct a little more money from your paycheck.
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