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Key Federal Tax Figures for 2018

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We are pleased to provide our annually updated Key Federal Tax Figures summary. We trust this will be a helpful reference tool.

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There are several points of interest that emerge from a review of the 2018 Key Federal Tax Figures summary. Here is a brief digest of items of note.

Increase in Standard Deduction; Elimination of the Personal Exemption

The tax reform legislation enacted in December 2017 nearly doubled the standard deduction from $12,700 for a married couple filing a joint return to $24,000. Similar increases occurred for heads of household and single individuals. In contrast, the legislation eliminated the personal exemption. The exemption had been scheduled to increase to $4,150, but now is nonexistent.

Automobile Mileage Rates

The tax-free mileage rate for business use of a vehicle increased to 54.5 cents per mile from 53.5 cents per mile. Similarly, the tax deductible mileage rate for medical mileage increased to 18 cents per mile from 17 cents per mile while the mileage rate for charitable mileage remained unchanged at 14 cents per mile. Note that with the suspension of the moving expense deduction, there is no mileage reimbursement rate for moving mileage.

Other Inflation Adjustments for 2018

Inflation adjustments affect many areas, but not everything. Examine the specific issues that affect your organization carefully. Some examples:

 In 2017 and Returns for 2017In 2018 and Returns for 2018
Foreign earned income exclusion$102,100$104,100
OASDI maximum wage base$127,200$128,400
Maximum annual contribution to defined contribution plan$54,000$55,000
Maximum salary deduction for 401(k)/403(b)$18,000$18,500
401(k)/403(b) “catch-up” limit$6,000$6,000
IRA contribution limit$5,500$5,500
IRA over 50 “catch-up” limit$1,000$1,000
Highly compensated employee limit$120,000$120,000
Annual gift tax exclusion amount$14,000$15,000

Please contact us with any questions.

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