3 Points About the New 2018 Tax Law Seniors Should Know:

 Is Social Security Taxable?

Combined Income is not taxable under $25,000. As a general rule, Social Security income is taxable! 15% of your social security benefit is a tax free benefit under the tax rules. However, you could pay a maximum of 85% on your Social Security income depending on your total combined income. Combined Income is your Adjusted Gross Income plus your non-taxable interest plus one-half of your Social Security income that year.

Individuals with combined income of $25,000 to $34,000 will pay up to 50% income tax on every dollar of Social Security income over the $25,000 threshold. Individuals with combined income of more than $34,000 will pay up to 85% income tax on every dollar of Social Security income over the $34,000 threshold.*

There are strategies to avoid paying taxes going into retirement which include Roth IRAs and having the Social Security Administration withhold taxes from every check or pay quarterly.

What are the Rules on Gifting and Estate Tax?

The tax exempt gift limit during an individuals lifetime is now $5.6M. The tax exempt estate and gift tax is the same $5.6M per individual. However, the lifetime and estate taxes work together. For example. If you give away $1M during your lifetime then at death you may only pass $4.6 as tax exempt.

Do I have to report gifts?

The reportable gifting limit per person per year went from $14k in 2017 to $15k in 2018. You must report a gift to a person over $15k to the IRS. This is presumably so that the IRS can track your gifting to subtract each gift over $15k from the total allowable lifetime and death tax amount of $5.6M.


Related Articles:

https://mcelderlaw.com/read-my-new-article-on-the-secure-act/
https://mcelderlaw.com/new-tax-bill-means/
https://mcelderlaw.com/the-secure-act-what-you-need-to-know/

This has been a summary of just a few of the tax law changes going into 2018 that I wanted to pen from my presentation and discussion at our March Monthly Client Breakfast. If you have any questions, please contact me at: 704-259-7040.

* Average SS Income for 2017 was $1,400 per month or $16,800 per year.

* Always consult a tax professional.

Greg McIntyre

greg@mcelderlaw.com

Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street

Shelby, NC 28150

704–259–7040

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Greg McIntyre, JD, MBA

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Greg McIntyre, founder of McIntyre Elder Law, is more than just an attorney. As a Navy Veteran, father to six kids, and a loving husband, he values family deeply. This drives his commitment to helping clients safeguard their futures and pass down legacies.

Greg has a passion to help people. Beyond just legal advice, he loves having conversations and strives to build a long-term relationship with every clients that comes through his door.

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