Question re 2018 tax rates

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bikechuck
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Question re 2018 tax rates

Post by bikechuck » Sun Jan 21, 2018 5:51 pm

I was looking at the 2018 tax tables and I would like to confirm my understanding about something for couples that are filing jointly and not itemizing deductions.

• There is a $24,000 exemption
• The 12% tax rate tops out at $77,400

I am assuming this means that a married couple could have $101,400 in earnings whilst remaining in the 12% bracket.
Is this correct?

JBTX
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Re: Question re 2018 tax rates

Post by JBTX » Sun Jan 21, 2018 6:00 pm

Yes you are correct

bikechuck
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Re: Question re 2018 tax rates

Post by bikechuck » Sun Jan 21, 2018 6:07 pm

JBTX wrote:
Sun Jan 21, 2018 6:00 pm
Yes you are correct
THANKS, this is helpful for planning purposes as 2018 is the first full year of retirement for me and my spousal unit.

The Wizard
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Re: Question re 2018 tax rates

Post by The Wizard » Sun Jan 21, 2018 6:11 pm

bikechuck wrote:
Sun Jan 21, 2018 5:51 pm
I was looking at the 2018 tax tables and I would like to confirm my understanding about something for couples that are filing jointly and not itemizing deductions.

• There is a $24,000 exemption
• The 12% tax rate tops out at $77,400

I am assuming this means that a married couple could have $101,400 in earnings whilst remaining in the 12% bracket.
Is this correct?
Exemptions have been eliminated, sorry.
There is only a $24k Standard Deduction for 2018, but only if you are both under age 65...
Attempted new signature...

bikechuck
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Re: Question re 2018 tax rates

Post by bikechuck » Sun Jan 21, 2018 8:01 pm

The Wizard wrote:
Sun Jan 21, 2018 6:11 pm
Exemptions have been eliminated, sorry.
There is only a $24k Standard Deduction for 2018, but only if you are both under age 65...
What?????????????

Are you saying that a couple now loses the $24K standard deduction for married filing jointly once one of you reaches the age of 65? Does it go to zero once one of the parties reaches the age of 65?

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samsoes
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Re: Question re 2018 tax rates

Post by samsoes » Sun Jan 21, 2018 8:16 pm

bikechuck wrote:
Sun Jan 21, 2018 8:01 pm
The Wizard wrote:
Sun Jan 21, 2018 6:11 pm
Exemptions have been eliminated, sorry.
There is only a $24k Standard Deduction for 2018, but only if you are both under age 65...
What?????????????

Are you saying that a couple now loses the $24K standard deduction for married filing jointly once one of you reaches the age of 65? Does it go to zero once one of the parties reaches the age of 65?
Relax! If you're over 65, the standard deduction is slightly larger than $24k (a couple of thousand, I believe).

Personal exemptions are gone for everyone, unfortunately.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren at Little Round Top @ Gettysburg National Military Park.)

JBTX
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Re: Question re 2018 tax rates

Post by JBTX » Sun Jan 21, 2018 8:23 pm

https://www.google.com/amp/s/www.forbes ... eform/amp/

What you originally said was correct except it is called a “standard deduction”, not an “exemption”. The result is the same. If you are over 65 the amount is a little bit higher.

The standard deduction is now much higher, it there are no longer personal exemptions like there used to be.

Jamesla30
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Re: Question re 2018 tax rates

Post by Jamesla30 » Sun Jan 21, 2018 8:25 pm

I thought his statement sounded confusing too... But no, you still get the $24k deduction plus an additional $1300/each for being over 65. So $26,600 deduction :)

bikechuck
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Re: Question re 2018 tax rates

Post by bikechuck » Sun Jan 21, 2018 8:39 pm

samsoes wrote:
Sun Jan 21, 2018 8:16 pm
bikechuck wrote:
Sun Jan 21, 2018 8:01 pm
The Wizard wrote:
Sun Jan 21, 2018 6:11 pm
Exemptions have been eliminated, sorry.
There is only a $24k Standard Deduction for 2018, but only if you are both under age 65...
What?????????????

Are you saying that a couple now loses the $24K standard deduction for married filing jointly once one of you reaches the age of 65? Does it go to zero once one of the parties reaches the age of 65?
Relax! If you're over 65, the standard deduction is slightly larger than $24k (a couple of thousand, I believe).

Personal exemptions are gone for everyone, unfortunately.
Thanks for helping me reach a state of deep relaxation

Breathe in ... Breathe out
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Bonnan
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Re: Question re 2018 tax rates

Post by Bonnan » Sun Jan 21, 2018 9:02 pm

What is your reference claiming an "adder" for over 65 standard deduction? My sources say there is none; are they incorrect?

tomd37
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Re: Question re 2018 tax rates

Post by tomd37 » Sun Jan 21, 2018 9:04 pm

When it comes to discussing exemptions people need to use correct terminology; a personal exemption is for the taxpayer or spouse, and a dependent exemption is for each person who can be claimed as a dependent.

Then there is a standard deduction or itemized deduction. The standard deduction can be increased by a specified amount for the taxpayer or spouse being 65 or older as of the last day of the tax year. For tax year 2017 that amount is $1,250 per qualified individual. The same additional amount is applicable for each taxpayer or spouse that is blind and meets the requirements for being determined as such.

All this information is available in IRS Publication 17, Chapter 20. The publication is available for downloading at the IRS website www.irs.gov. Printed copies of Pub 17 are no longer available by mail.
Tom D.

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FiveK
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Re: Question re 2018 tax rates

Post by FiveK » Mon Jan 22, 2018 12:57 am

Bonnan wrote:
Sun Jan 21, 2018 9:02 pm
What is your reference claiming an "adder" for over 65 standard deduction? My sources say there is none; are they incorrect?
Page 14 of rp-17-58.pdf is one plausible source.

But see also Standard Deduction in 2018 - Bogleheads.org.

Hockey10
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Re: Question re 2018 tax rates

Post by Hockey10 » Mon Jan 22, 2018 1:16 pm

tomd37 wrote:
Sun Jan 21, 2018 9:04 pm

All this information is available in IRS Publication 17, Chapter 20. The publication is available for downloading at the IRS website www.irs.gov. Printed copies of Pub 17 are no longer available by mail.
While no longer available from the IRS by mail, you can purchase Pub 17 from Amazon for $10. I find it to be $10 well spent each year.

FactualFran
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Re: Question re 2018 tax rates

Post by FactualFran » Mon Jan 22, 2018 3:24 pm

Bonnan wrote:
Sun Jan 21, 2018 9:02 pm
What is your reference claiming an "adder" for over 65 standard deduction? My sources say there is none; are they incorrect?
Your sources are based on the version of the Tax Cuts and Jobs Act that was initially passed by the House. The version produced by the conference committee that resolved the differences between the versions passed by the House and Senate did not eliminate the additional standard deductions for those at least 65 years old or blind. The version produced by the conference committee is what became enacted.

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