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Key Retirement and Tax Numbers for 2018

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans, thresholds for deductions and credits, and standard deduction and personal exemption amounts. Here are a few of the key adjustments for 2018.

Employer retirement plans

  • Employees who participate in 401(k), 403(b), and most 457 plans can defer up to $18,500 in compensation in 2018 (up from $18,000 in 2017); employees age 50 and older can defer up to an additional $6,000 in 2018 (the same as in 2017).
  • Employees participating in a SIMPLE retirement plan can defer up to $12,500 in 2018 (the same as in 2017), and employees age 50 and older can defer up to an additional $3,000 in 2018 (the same as in 2017).

IRAs

The limit on annual contributions to an IRA remains unchanged at $5,500 in 2018, with individuals age 50 and older able to contribute an additional $1,000. For individuals who are covered by a workplace retirement plan, the deduction for contributions to a traditional IRA is phased out for the following modified adjusted gross income (AGI) ranges:

2017 2018
Single/head of household (HOH) $62,000 – $72,000 $63,000 – $73,000
Married filing jointly (MFJ) $99,000 – $119,000 $101,000 – $121,000
Married filing separately (MFS) $0 – $10,000 $0 – $10,000

Note:  The 2018 phaseout range is $189,000 – $199,000 (up from $186,000 – $196,000 in 2017) when the individual making the IRA contribution is not covered by a workplace retirement plan but is filing jointly with a spouse who is covered.

The modified AGI phaseout ranges for individuals to make contributions to a Roth IRA are:

2017 2018
Single/HOH $118,000 – $133,000 $120,000 – $135,000
MFJ $186,000 – $196,000 $189,000 – $199,000
MFS $0 – $10,000 $0 – $10,000

Estate and gift tax

  • The annual gift tax exclusion for 2018 is $15,000, up from $14,000 in 2017.
  • The gift and estate tax basic exclusion amount for 2018 is $5,600,000, up from $5,490,000 in 2017.

Personal exemption

The personal exemption amount for 2018 is $4,150, up from $4,050 in 2017. For 2018, personal exemptions begin to phase out once AGI exceeds $266,700 (single), $293,350 (HOH), $320,000 (MFJ), or $160,000 (MFS).

Note:  These same AGI thresholds apply in determining if itemized deductions may be limited. The corresponding 2017 threshold amounts were $261,500 (single), $287,650 (HOH), $313,800 (MFJ), or $156,900 (MFS).

Standard deduction

These amounts have been adjusted as follows:

2017 2018
Single $6,350 $6,500
HOH $9,350 $9,550
MFJ $12,700 $13,000
MFS $6,350 $6,500

Note:  The 2018 additional standard deduction amount (age 65 or older, or blind) is $1,600 (up from $1,550 in 2017) for single/HOH or $1,300 (up from $1,250 in 2017) for all other filing statuses. Special rules apply if you can be claimed as a dependent by another taxpayer.

Alternative minimum tax (AMT)

2017 2018
Maximum AMT exemption amount
Single/HOH $54,300 $55,400
MFJ $84,500 $86,200
MFS $42,250 $43,100
Exemption phaseout threshold
Single/HOH $120,700 $123,100
MFJ $160,900 $164,100
MFS $80,450 $82,050
26% on AMTI* up to this amount, 28% on AMTI above this amount
MFS $93,900 $95,750
All others $187,800 $191,500
*Alternative minimum taxable income

 
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

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