The tax reform bill that Congress passed in December took effect on Jan. 1. Your tax rate probably went down, which means you’ll probably pay less in taxes this year.

Here are some other aspects of the new law that you’ll want to pay attention to:

Workplace retirement plans: You can contribute up to $18,500 to your 401(k), 403(b), 457 and Thrift Savings Plan accounts — a $500 increase over last year. If you’re age 50 or older, you are allowed a $6,000 catch-up for a total contribution of up to $24,500.

For self-employed or small-business owners: You can contribute up to $55,000 to a SEP IRA or Solo 401(k) plan.

IRAs: You can contribute up to $5,500 to traditional and Roth IRAs — or up to $6,500 if you are 50 or older. The limit for employee contributions to SIMPLE retirement accounts is $12,500 (or up to $3,000 more if you are 50 or older).

Federal gift tax: You can give up to $15,000 per person this year without incurring any gift tax (recipients never pay a gift tax). You can also give up to $11.2 million over the course of your lifetime — and if you’re married, your spouse can do the same.

Federal estate tax: Upon your death, you can leave an unlimited amount of money to your spouse and up to $11.18 million to other heirs. If you’re married and you obtain certain estate planning documents, you and your spouse can leave up to $22.36 million to heirs, free of estate tax.

Both the gift and estate tax provisions, along with the personal tax cuts, are set to expire after Dec. 31, 2025, but the corporate tax relief was made permanent.

In the accompanying tables, the figures in the 2017 columns apply to the tax return you’ll file for tax year 2017. The figures in the 2018 columns pertain to the tax return you’ll file for 2018 (which you’ll do in 2019).

Retirement Plans 2018 2017
Traditional, Roth IRA $5,500 $5,500
Simple IRA $12,500 $12,500
401(k), 403(b), TSP plans $18,500 $18,000
SEP IRA & Individual 401(k) $55,000 $54,000
Catch-Up Contributions
(available if you are age 50 or older)
2018 2017
Traditional, Roth IRA $1,000 $1,000
Simple IRA $3,000 $3,000
401(k), 403(b), TSP plans $6,000 $6,000
Roth IRA Phase-Out Income Limits 2018 2017
Married filing jointly $189,000 – $199,000 $186,000 – $196,000
Single $120,000 – $135,000 $118,000 – $133,000
Deductible IRA Phase-Out Income Limits
If you are not covered by a retirement plan at work, but your spouse is
2018 2017
Married filing jointly*
*or if you lived with your spouse at any time during the year
$189,000 – $199,000 $186,000 – $196,000
Deductible IRA Phase-Out Income Limits
If you are covered by a retirement plan at work
2018 2017
Married filing jointly $101,000 – $121,000 $99,000 – $119,000
Single $63,000 – $73,000 $62,000 – $72,000
Tax Exemptions and Deductions 2018 2017
Personal and dependent exemption Eliminated $4,050
Standard deduction, married filing jointly $24,000 $12,700
Standard deduction, unmarried (other than surviving spouse and head of household) $12,000 $6,350
Business mileage (cents per mile) $0.545 $0.535
Schedule A long-term care premium deduction (NOTE:The long-term care deduction is not an outright federal tax deduction. The amount shown for your age group is added to your other medical expenses for the year, and total costs that exceed 7.5 percent of your adjusted gross income can be deducted for 2017 and 2018. If your're self-employed, you can deduct the premiums for your qualified long-term care policies if you made a net profit; deductible medical expenses are defined in IRS Publication 502.
If you are age 40 or under $420 $410
If you are age 41–50 $780 $770
If you are age 51–60 $1,560 $1,530
If you are age 61–70 $4,160 $4,090
If you are age 71 or over $5,200 $5,110
Social Security 2018 2017
Wage base $128,400 $127,200
Retirement earnings limit prior to full retirement age $17,040 $16,920
Tax Rates Married Filing Jointly Single
(other than surviving spouse and head of household)
Your Marginal Tax Rate Is: If your 2018 taxable income is no more than 2017 limit (percentages below are 2017 tax rates) If your 2018 taxable income is no more than 2017 limit
10% $19,050 $18,650 $9,525 $9,325
12% $77,400 (15%) $75,900 $38,700 (15%) $37,950
22% $165,000 (25%) $153,100 $82,500 (25%) $91,900
24% $315,000 (28%) $233,350 $157,500 (28%) $191,650
32% $400,000 (33%) $416,700 $200,000 (33%) $416,700
35% $600,000 $470,700 $500,000 $418,400
37% $600,001+ (39.6%) $470,701+ $500,001+ (39.6%) $418,401+
Gifts and Bequests
You can give up to $11.18 million during your lifetime with no federal gift tax, and your spouse can do the same. The 2017 lifetime limit was $5.49 million per individual.
Starting in 2018, in addition to the lifetime limit, you can give up to $15,000 annually free of federal gift tax to as many individuals as you wish, and your spouse can do the same. From 2013 through 2017, the limit was $14,000 per individual.

Hire a Professional

To ensure you don’t overlook any deductions and credits available to you, we recommend you retain the services of a professional tax preparer. We caution against reliance on friends or family members for two reasons: Only CPAs, enrolled agents and attorneys are permitted to represent you before the IRS — meaning you’re on your own to explain your return if it was prepared by a friend. And well-meaning friends might not stand by their work, so if the IRS assesses a penalty, you’ll have to pay it. Professional tax advisors are often willing to pay any penalties resulting from their errors.