Earlier this week the IRS announced more than 50 annual inflation adjustments for tax provisions. These inflation adjustments include the tax rate schedules as well as some of the following key deductions, thresholds, and limits:
- The standard deduction has increased $50 for single, married filing separately, and head of household taxpayers and $100 for married filing jointly. New thresholds are $6,350 (single/MFS), $9,350 (HOH) and $12,700 (MFJ).
- The personal exemption remains the same, but the phaseout threshold has increased, the phaseout has increased $2,100 for single taxpayers and $2,500 for married filing jointly. The personal exemption will be fully phased out at $384,000 for single taxpayers and $436,300 for married filing jointly.
- Phaseout ranges for contributing to a traditional IRA have increased $1,000. The contribution will be fully phased out at $72,000 for single taxpayers and $119,000 for married filing jointly.
- Contributions to most retirement plans remain the same, there is an $18,000 maximum contribution to 401(k) plans and $5,500 to IRA plans. Catch-up contributions also remain the same at $6,000 and $1,000, respectively.
