“I Do, Taxes Included.”

“I Do, Taxes Included.”

There’s a new meaning to “for better or for worse.”

Under the new tax reform, the marriage penalty is mostly gone. Several factors go into this, like whether you are married, how much you earn and how you file your taxes. New this year, married couples will receive a higher standard deduction for filing jointly, unless they are among the nation’s top earners.

If you’re unfamiliar, here’s a simplified breakdown of how the marriage penalty works:

  • Let’s say that two single individuals each earn a taxable income of $90,000 per year.
  • Under the old tax brackets, both of these individuals would fall into the 25% bracket for singles.
  • If this couple were to get married, their combined income of $180,000 would have catapulted them into the 28% bracket.
  • Under the new brackets, the couple will fall into the 24% marginal bracket…regardless of whether they were married or not.

Believe it or not, that minimal 4% will positively affect this couples’ bank account. The standard deduction for a married couple in the 24% marginal bracket is $24,000. Last year, they would have received a deduction of $12,700.

Before you ask, choosing to file separately would result in a $12,000 deduction. Across the board, the threshold for singles and married couples is exactly double…for most Americans.

This is where you come in, high wage earners. If you have a taxable income over $400,000, your final tax bill will be a little different. For an optimized return, you should contact a CPA for next steps.

So, before saying I do, keep in mind that your taxes will be a little more complex.

There are perks though.

  • Company benefits finally benefit you. You can shop around to find the best healthcare and dependent care benefits, which ultimately impact your take home pay.
  • Take a look at your W-4. Did you know adding an additional allowance or changing your filing to married on your W-4 could result in less taxes taken out and more money in your pocket each paycheck? Consult a professional for the best advice.
  • Itemizing? The new standard deduction for married couples making less than $399,000 is pretty lofty. It may be beneficial to claim the standard deduction rather than itemize. Talk about time saved!

Let’s walk through your finances to ensure you’re set up for success next spring. Reach out today, and we’ll help you hash out the nitty gritty details.

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This New Tax Law Will Save You $2,000+

Freedom from tax penalties

This New Tax Law Will Save You $2,000+

The new tax law brought a lot of changes for taxpayers this year. We broke down the 4 key changes in blogs posted earlier this year. Please check them out if you missed them. Those changes resulted in some winners and some losers. Beyond those 4 big change, there are other smaller changes that are great news for many taxpayers.

One change that resulted from the Tax Cut and Jobs Acts of 2017 is a removal of the individual mandate included to the Affordable Care Act. This could save a lot of patients big money at tax time! Many taxpayers did not have the required minimum essential coverage and had to a penalty. The fee was a hefty $2,085 per family or 2.5% of your income, whichever was higher.

Thankfully, 2018 is the last year that penalty will apply. Beginning in 2019, there will no longer be a penalty for not having health insurance.

While this is good news from a tax standpoint, you might be asking: Who in the world would not want health insurance? The average American spent $10,345 on healthcare in 2016. With insurance. The average family plan cost $833 per month, which led to many finding healthcare unaffordable and looking for alternative solutions.

We highly recommend a solution that saves you tax dollars and in your healthcare costs. A longtime practice, the direct primary care model is more about patients and less about business. The physician provides unlimited services for an affordable monthly fee, which sounds much better than the high deductible plans many insurance companies offer. We estimate that the removal of the penalty, coupled with the option to get quality healthcare via other options could save families over $8,000 beginning in 2019. Needless to say, this is certainly a great savings, and news worth celebrating.

What do you think? Will you keep or drop your insurance in 2019?

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