Friday, October 20, 2017

IRS Announces 2018 Inflation Adjustments for 50 Tax Items

The IRS on October 19 announced inflation adjustments for more than 50 tax provisions, including tax rate tables.

The standard deduction, estate exclusion, and AMT exemption level will increase in tax year 2018, the IRS said in Revenue Procedure 2017-58 and a related news release, IR-2017-178.

In tax year 2018, married taxpayers filing jointly can take a standard deduction of $13,000—an increase of $300, the IRS said. For single taxpayers and married taxpayers filing separately, the standard deduction will rise to $6,500 from $6,350. The standard deduction for heads of households will increase to $9,550 from $9,350.

A 39.6 percent tax rate will apply to single taxpayers with incomes of more than $426,700 ($480,050 for couples filing jointly)—an increase from the 2017 levels of $418,400 and $470,700 respectively, the IRS said. The 10, 15, 25, 28, 33, and 35 percent rates and tax thresholds for 2018 are provided in the revenue procedure, it said.

A basic exclusion of $5.6 million applies to estates of decedents who die in 2018, a $102,100 increase from tax year 2017, the IRS said.

The alternative minimum tax exemption level is $55,400 and will begin to phase out at $123,100; for couples filing jointly, the exemption amount is $86,200 with a phaseout beginning at $164,100, the IRS said.

The personal exemption for tax year 2018 is also $100 higher at $4,150, but will begin to phase out with adjusted gross incomes of $266,700 ($320,000 for married couples filing jointly) and completely phases out at $389,200 ($442,500 for married couples filing jointly).

IR 2017-178 is available at here.

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