In this issue of the DiGiorgio Law Firm, PLLC Estate Planning Newsletter we highlight some of the key changes in the Tax & Medicaid law which went into effect in 2018.
- The Tax Cuts & Jobs Act of 2017 signed into law on December 22, 2017
- Top Marginal Corportate Tax Rate decreased from 35% to 21%;
- Tax Rates on Capital Gsins: 0% for individuals with income up to $38,600 and couples upto $77,200; 15% for individuals up to $425,800 and couples up to $479,000; 20% forindividuals over $425,800 and couples over $479,000;
- Income Tax Rates: 10% individuals up to $9,525 and couples up to $19,050; 12%individuals up to $38,700 and couples up to $77,400; 22% individuals up to $82,500 andcouples up to $165,000; 24% individuals up to $157,500 and couples up to $315,000; 32%individuals up to $200,000 and couples up to $400,000; 35% individuals up to $500,000 andcouples up to $600,000; 37% individuals over $500,000 and couples over $600,000;
- Standard Deduction increased from $6,350 to $12,000 for an individual and from$12,700 to $24,000 for couples, but these increase to the standard deduction wereaccompanied by an elimination of the personal exemption of $4,050. Since the personalexemption reduced taxes by $1 for each dollar of exemption, the loss of the personalexemption outweighs the value of the increased standard deduction, so many taxpayers whodo not itemize will be adversely effected by this change.
- Federal Exemptions for Estate, Gift and GST Tax increased from $5,490,000 in 2017 to$11,200,000 in 2018.
- Tob Marginal Estate Tax Rate: 40%
- Fedral Gift Tax Annual Exclusion increased from $14,000 to $15,000
- New York State Exemption from Estate Tax $5,250,000 April 1, 2017 thru December 31, 2018.
- Top Marginal NY Estate Tax Rate: 16%
- Wages Subject to Social Security Tax in 2018: increased from $127,200 to $128,700.
- Sunset Provision: With the exception of the Corporate Tax Rate, most of the federal changes to rates and exemptions described above will sunset after 2025 and revert back to the levels in effect in 2017.
- Medicaid Resource & Income Eligibility Levels for 2018
- Resource Levels for Chronic Care Medicaid (Nursing Home) $15,150 for the Medicaid Recipient & the greater of $74,820 or ½ of combined spousal resources up to $123,600
- Income for Chronic Care: $50 for the recipient and $3,090 for the community spouse;
- Resource Levels for Community Care: $15,150 Individual or $22,200 for a cople;
- Income Levels for Community Care: $842 Individual or $1,233 for a couple