Threshold Changes for 2018

Last week the Social Security Administration and the IRS began updating thresholds that will impact 2018 taxes. Below are some key changes you’ll see in play next year:
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Social Security Administration Updates:

1. The Social Security Wage base is increasing from $127,200 to $128,400
2. The Nanny tax threshold is increasing from $2,000 to $2,100

For more information click to see the Social Security Administration's 2018 Fact Sheet.

​IRS Updates:

1. The contribution limit for 401(k) plan contributions is increasing to $18,500 from $18,000
2. The limit on annual contributions to an IRA or SIMPLE plan remains unchanged at $5,500 and $12,500, respectively.
3. Phase-out thresholds for traditional and Roth IRA contributions both increased slightly.
4. The standard deduction will increase $300 to $13,000 for married filing jointly
5. The standard deduction will increase $150 to $6,500 for single taxpayers
6. The standard deduction will increase $200 to $9,550 for heads of households
7. The personal exemption will increase $100 to $4,150
8. Tax brackets and phase-out limitations have increased slightly
9. The annual exclusion for gifts increased $1,000 to $15,000

For more information on the retirement plan changes click to see Notice 2017-64

For more information on the inflation-adjusted items click to see Revenue Procedure 2017-58

This article was updated on 11/30/2017 to reflect the updated social security threshold of $128,400 previously announced at $128,700.