As
it does every year at this time, the Internal Revenue Service has announced the
new inflation and COLA adjustments for calendar year 2018.
I am
in the process of preparing my annual “What’s New in Taxes for 2018”
report. I will let you know when it is
available. But I will identify some of
the basic changes for you here.
For
calendar year 2018 tax returns -
The
Personal Exemption is $4,150 (up from $4,050).
The
Standard Deduction Amounts are:
Single
and Married Filing Separate= $6,500 (up from $6,350)
Head
of Household = $9,550 (up from $9,350)
Married
Filing Joint and Qualified Widow(er) = $13,000 (up from $12,700)
The
Standard Deduction for a dependent remains the greater of (1) $1,050, or (2)
the sum of $350 and the individual's earned income.
The
additional Standard Deduction amount for the age 65 or older or blind is $1,300
(up from $1,250) for married individuals and $1,600 (up from $1,550) for Single
and Head of Household.
The
maximum IRA contribution and “catch-up” remains at $5,500 and $1,000.
The
maximum employee contribution to a 401(k), 403(b), 457 and federal Thrift
Savings Plan is $18,500 (up from $18,000).
The “catch-up” contribution remains at $6,000.
The
estate and gift tax exemption is $5.6 million (up from $5.49 million).
The
annual gift exclusion amount is $15,000 (up from $14,000).
It is important to note that these
numbers are for the tax law as it currently exists. Tax legislation may be passed by the end of
the year that changes some or all of the above numbers.
Click
here for the official IRS “Revenue Proclamation”.
To
see the appropriate numbers for 2017 tax returns, click here.
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