It’s that time of year again! As the joy of the holiday season comes to an end, we now turn to the joy of tax season – preparing the returns for 2017 and looking at what 2018 brings. Much is changing this year, as the Tax Cuts and Jobs Act of 2017 (TCJA) was signed into law late 2017. Here’s a roundup of what to expect for 2018. There’s a lot here, so feel free to skim through to what applies to you!
The Adjusted Gross Income (AGI) limit that disallows all direct contributions increased with inflation to $199,000 for Joint filers and $135,000 for Single taxpayers. Contributions begin to phase out at AGI of $189,000 for Joint filers and $120,000 for Single filers.
Estate Tax Exemption: The Federal Estate Tax Exemption increased greatly from $5.49 million in 2017 to $11.2 million in 2018, making the total exemption for a married couple $22.4 million. The tax rate for amounts exceeding the exemption remains 40%.