IRS Announces Cost-of-Living Adjustments for 2018
The IRS recently issued the inflation-adjusted numbers for 2018, although a few of these may change, depending on tax law changes working their way through Congress. Some of the numbers that should not be affected by any tax bill:
The contribution limit for IRAs remains at $5,500, but the limit for 401(k) plans increases by $500 to $18,500.
The “kiddie tax” remains at $2,100. The unearned income (interest, dividends, capital gains) in excess of $2,100 of children under age 18 or students up to age 23 whose earned income is less than half their support is taxed at the parents’ highest rate.
The “nanny tax” remains at $2,100. If wages in excess of $2,100 are paid to babysitters, housekeepers or gardeners, the taxpayer is liable for Social Security and unemployment taxes, as well as withholding for state and federal taxes.
The annual gift tax exclusion, stuck at $14,000 since 2013, will be $15,000.
The information in the website is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to income tax apply to federal taxes only. Federal estate tax, state income/estate taxes or state law may impact your results.