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

The 2018 phase out 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 phase out 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 phase out of personal exemptions or overall limit on itemized deductions once AGI exceeds certain thresholds.

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

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 phase out 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

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018