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  • Purpose Partner Update

    In 2018 we introduced you to one of our Purpose Partners, Delta Streets Academy. We were very honored to be a sponsor in their fall fundraiser in Jackson. The Open Date Classicis one of two fund raising events each year hosted by DSA.

    DSA is an all-boys school in Greenwood, Mississippi that is changing the lives of its students and the community both academically and spiritually. They have an incredible group of high-quality teachers, staff and coaches with high standards in the class room and on the field.

    In February the DSA Lions finished their basketball season with a 17-13 record. The Lions won the District Championship and ranked fourth overall in the state. “As the guys competed this season, each one accepted their role and made our team better because of their role,” said Head Coach T. Mac Howard. "I want to say a special thanks to our seniors: Isaiah Blackmon, DJ Alston, Narada Smith and Qua Fuller. The example they set all season was exactly what you want from your senior class!"

    Congratulations Lions! We are proud of you!

    While we do not solicit for Delta Streets Academy we do support them and we’d like to encourage you to take a deeper look at DSA by clicking the link below.

    www.deltastreetsacademy.org

  • Are you ready for changes in your tax return this year?

    Are you ready for tax time? While it isn’t really an exciting time, it’s something we all have to deal with, and this year there will be big changes. You probably remember all the big tax law changes announced in 2017, but now those changes will be seen in action with your 2018 tax return. Now that these tax reforms are impacting you in an immediate way, let’s take a look at some of the biggest changes that you need to be ready for as you file in the coming weeks.

    Higher Standard Deductions

    The most significant change is a new, higher standard deduction consisting of $12,000 for single filers, $18,000 for heads of household and $24,000 for people married filing jointly. Taxpayers have always had a choice between taking the standard deduction and itemizing — taking individual write-offs for things like mortgage interest and charitable contributions — but because the standard deduction has gone up, itemizing will make sense for fewer people. According to some estimates, nearly 90 percent of taxpayers will now take the standard deduction, up from about 70 percent in previous years.

    New Tax Brackets

    Another impactful change is the new tax brackets. The new tax brackets are broken out as follows:

    Single Filing:

    Tax Rate

    2018 Income Range

    10%

    $0 - $9,525

    12%

    $9,525.01 - $38,700

    22%

    $38,700.01- $82,500

    24%

    $82,500.01 - $157,500

    32%

    $157,500.01 - $200,000

    35%

    $200,000.01 - $500,000

    37%

    $500,000.01+


    Married Couple Filing Jointly:

    Tax Rate

    2018 Income Range

    10%

    $0.00 - $19,050

    12%

    $19,050.01 - $77,400

    22%

    $77,400.01 - $165,000

    24%

    $165,000.01 - $315,000

    32%

    $315,000.01 - $400,000

    35%

    $400,000.01 - $600,000

    37%

    $600,000.01+


    Head of Household Filing:

    Tax Rate

    2018 Income Range

    10%

    $0 - $13,600

    12%

    $13,600.01 - $51,800

    22%

    $51,800.01 - $82,500

    24%

    $82,500.01 - $157,500

    32%

    $157,500.01 - $200,000

    35%

    $200,000.01 - $500,000

    37%

    $500,000.01+

    Source: IRS

    Remember that the tax rates above only apply to the income in the corresponding brackets. If you earned more money and find yourself in a higher tax bracket, you will not pay the higher tax rate on all of your income -- only on the income in that bracket. The highest tax rate you pay is called your "marginal tax rate," because it applies to each additional dollar in income.

    Changes in limits for State and Local Income Tax (SALT) deductions

    This year State and Local income Tax deductions are limited to just $10,000. While this change won’t be a burden to all homeowners, it will hit folks hardest in states with the highest property taxes, which include New Jersey, Connecticut, Wisconsin, Illinois and California.

    Dependent exemptions are no longer available, but child tax credits have gone up

    The $4,050 dependent exemptions that millions of parents had grown accustomed to taking for their children are no longer allowed, but the child tax credit was raised from $1,000 to $2,000, for children under 17, and families earning up to $400,000 can take advantage of the credit. The law also introduced a $500 credit for non-child dependents, which could include elderly parents or children over the age of 17.

    Medical expense deductions have changed

    In years past, your medical expenses had to exceed 10 percent of your annual income before you could deduct them, but now if they exceed 7.5 percent you can enjoy that deduction — if you itemize.

    Expansion in allowable usage for 529 accounts

    Prior to 2018, funds from 529 educational savings plans could only be used for college, but under the new law, families can use them for tuition expenses for grades K-12 as well as for university studies. This can be really beneficial for parents paying for private school or religious schools.

    Now that we’ve had a full year with the new tax laws in force, we can better understand where adjustments in the tax planning portion of your financial plan are needed. These changes in the tax laws not only have a significant impact on your 2018 tax return, but also your overall financial plan. You may need to ask yourself some challenging questions like: Do you need to reevaluate your withholdings? Should you reconsider how much and when you make charitable donations? How does this impact your estate plan? At Sound Financial Strategies Group, we thrive on helping our clients navigate retirement, and that means including a plan for dealing with your taxes. Give us a call today and let us help you navigate this important part of your retirement plan!

    Investment Advisory Services offered through Sound Financial Strategies Group, Inc. (“SFSG”), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies. 

     

    Sound Financial Strategies Group does not render tax advice and encourages all clients to contact their own tax professional for tax matters and advice.

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