Key Retirement and Tax Numbers for 2018

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/Head of Household (HOH) $118,000 – $133,000 $120,000 – $135,000
Married Filing Jointly (MFJ) $186,000 – $196,000 $189,000 – $199,000
Married Filing Separately (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 $11,200,000, up from $5,490,000 in 2017.

Personal Exemption

There is no personal exemption amount for 2018; it was $4,050 in 2017. For 2018, there is no phaseout of personal exemptions or overall limit on itemized deductions once AGI exceeds certain thresholds.

Note: For 2017, personal exemptions were phased out and itemized deductions were limited once AGI exceeded $261,500 (single), $287,650 (HOH), $313,800 (MFJ), or $156,900 (MFS).

Standard Deduction

  2017 2018
Single $6,350 $12,000
Head of Household $9,350 $18,000
Married Filing Jointly $12,700 $24,000
Married Filing Separately $6,350 $12,000

Note: The additional standard deduction amount for the blind or aged (age 65 or older) in 2018 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
Exemption Phase-Out Threshold
Single/Head of Household (HOH) $54,300 $70,300
Married Filing Jointly (MFJ) $84,500 $109,400
Married Filing Separately (MFS) $42,250 $54,700
Exemption Phase-Out Threshold
Single/Head of Household (HOH) $120,700 $500,000
Married Filing Jointly (MFJ) $160,900 $1,000,000
Married Filing Separately (MFS) $80,450 $500,000
26% Rate on AMTI* Up To This Amount, 28% Rate on AMTI Above This Amount
Married Filing Separately (MFS) $93,900 $95,750
All Others $187,800 $191,500
*Alternative Minimum Taxable Income

For more information on the matters discussed above, please contact us.

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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

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