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Federal tax information

From Social Security to estate taxes, see how tax figures compare from 2017 to 2018.

The following table provides some important federal tax information for 2018, as compared with 2017. Many of the dollar amounts are unchanged and some changed only slightly due to inflation.

Social Security/ Medicare 2018 2017
Social Security Tax Wage Base $128,400 $127,200
Medicare Tax Wage Base No limit No limit
Employee portion of Social Security 6.2% 6.2%
Employee portion of Medicare 1.45% 1.45%
Individual Retirement Accounts 2018 2017
Roth IRA Individual, up to 100% of earned income  $5,500 $5,500
Traditional IRA Individual, up to 100% of earned Income  $5,500 $5,500
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older  $1,000 $1,000
Qualified Plan Limits 2018 2017
Defined Contribution Plan limit on additions on Sections 415(c)(1)(A)  $55,000 $54,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))  $220,000 $215,000
Maximum compensation used to determine contributions  $275,000 $270,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $18,500 $18,000
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older  $6,000 $6,000
SIMPLE deferrals (Section 408(p)(2)(A))  $ 12,500 $ 12,500
SIMPLE additional “catch-up” contributions for employees age 50 and older  $3,000 $3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B))  $120,000 $120,000
Compensation defining key employee (officer)  $175,000 $175,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))  $600 $600
Driving Deductions 2018 2017
Business mileage, per mile 54.5 cents 53.5 cents
Charitable mileage, per mile 14 cents 14 cents
Medical and moving, per mile 18 cents 17 cents
Business Equipment 2018 2017
Maximum Section 179 deduction $1,000,000 $510,000
Phase out for Section 179 $2.5 million $2.03 million
Transportation Fringe Benefit Exclusion 2018 2017
Monthly commuter highway vehicle and transit pass  $260 $255
Monthly qualified parking  $260 $255
Standard Deduction 2018 2017
Married filing jointly $24,000 $12,700
Single (and married filing separately) $12,000 $6,350
Heads of Household $18,000 $9,350
Personal Exemption 2018 2017
Amount N/A* $4,050
Personal Exemption Phaseout 2018 2017
Married filing jointly and surviving spouses N/A* Begins at $313,800
Heads of Household N/A* Begins at $287,650
Unmarried individuals N/A* Begins at $261,500
Married filing separately N/A* Begins at $156,900
Domestic Employees 2018 2017
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $2,100 $ 2,000
Kiddie Tax 2018 2017
Net unearned income not subject to the “Kiddie Tax” **$2,100 $2,100
Estate Tax 2018 2017
Federal estate tax exemption $11.2
Maximum estate tax rate 40% 40%
Annual Gift Exclusion 2018 2017
Amount you can give each recipient $15,000 $14,000

* The Tax Cuts and Jobs Act (TCJA) eliminates the personal exemption beginning in 2018.

** The TCJA changes the way the Kiddie Tax is imposed.

***The TCJA raises the estate tax exemption to $10 million for 2018. Adjusted for inflation this exemption is expected to be $11.2 million.

Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.