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 $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 |
| HOH | $9,350 | $18,000 |
| MFJ | $12,700 | $24,000 |
| MFS | $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 | |
|---|---|---|
| Maximum AMT exemption amount | ||
| Single/HOH | $54,300 | $70,300 |
| MFJ | $84,500 | $109,400 |
| MFS | $42,250 | $54,700 |
| Exemption phaseout threshold | ||
| Single/HOH | $120,700 | $500,000 |
| MFJ | $160,900 | $1,000,000 |
| MFS | $80,450 | $500,000 |
| 26% rate on AMTI* up to this amount, 28% rate on AMTI above this amount | ||
| MFS | $93,900 | $95,750 |
| All others | $187,800 | $191,500 |
| *Alternative minimum taxable income | ||
To find out more click here