Important Tax Figures for 2018
Every year, the dollar amounts allowed for various federal tax benefits are subject to change based on inflation adjustments and legislation. Here are some important tax figures for 2018, compared with 2017, including the estate tax exemption, Social Security wage base, qualified retirement plan and IRA contribution limits, driving deductions, allowable business write-off amounts and more.
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 million*** |
$5.49 million |
| 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.