Updated Financial & Tax Data for 2018

Key Data

As we expected, the “final” revisions made to the tax code by the “Tax Cut and Jobs Act” passed into law last December weren’t quite as final as supposed. There are a handful of provisions that didn’t turn out the way the Congressional Republicans intended, so they are trying to “correct” those. The IRS, meanwhile, has been working hard to find ways to implement the provisions that are not likely to need legislative attention – and, as we expected, they have had to revise a handful of cut-off and threshold numbers for 2018. A new “Key Data” information sheet showing the changes is available for free download here.

Here is a summary of the changes they’ve made so far:

  1. Alternative Minimum Tax Cut-off: Initially, the IRS had set the taxable income above which the 28 percent tax rate applies at $191,500 for joint returns, unmarried individuals, and estates and trust and $95,750 for married individuals filing separately. These have been revised downward, to $191,100 and $95,550 – and the exemption amount phase-out for estates and trusts was increased to $500,000 (from $82,500).
  2. Gift and Estate Tax Exclusions and Credits: The estate tax exclusion will be revised downward as well, to $11,180,000 (from $11,210,000).
  3. Savings Bond Interest: The income limits beyond which the tax break on savings bonds used for education begins to phase out were revised downward to $119,300 joint and $79,550 for all others (from $119,550 and $79,700).
  4. Health Savings Accounts (HSAs): The family HSA contribution for 2018 has been revised downward as well, to $6,850 from $6,900.

We don’t believe that very many of these changes to this coming year’s tax thresholds and phase-outs will make a significant difference to most of our clients, but we wanted to pass along the information. We’ve been using these Key Data sheets for a few years now, and they’ve always had a disclaimer saying “you’ll receive a PDF update in the event that the IRS changes the numbers in midyear” – but this is the first time it has actually happened.

Just to be clear, though: the 2017 numbers have not changed, so if you have already prepared or filed your 2017 taxes you don’t have to worry, or make last minute revisions – and if you haven’t you can still download the 2017 “Key Data” sheet here, and use it / take it with you to your tax-preparer appointment.

If you have specific questions about your particular situation, or general comments or concerns, please don’t hesitate to contact us. We’re happy to help however we can!