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IRS Releases Various Indexed Amounts for 2018

– by Brian Rippeon, CPA, Principal

IRS has released the following indexed amounts effective January 1, 2018:

  • Employee deferrals to retirement plans:  Elective deferrals to 401(k) plans, 403(b) plans, and the Federal Government’s Thrift Savings Plan are limited to $18,500 for 2018 (an increase of $500).
  • Retirement Plan Catch-Up Contributions:  The limit for catch-up contributions to 401(k) plans and Simple IRAs for individuals aged 50 or over remains unchanged at $6,000 for 2018.
  • Health Flexible Spending Accounts:  The 2018 dollar limitation for voluntary salary reductions for contributions to Section 125 Health Flexible Spending Accounts is $2,650.
  • Annual Gift Exclusion:  The first $15,000 of gifts to any person are not included in the total amount of taxable gifts made during 2018.
  • Section 179 Expensing:  For taxable years beginning in 2018, up to $520,000 of Section 179 expense may be elected, so long as total Section 179 eligible property placed in service during the taxable year is less than $2,070,000.  If total Section 179 eligible property placed in service during the taxable year exceeds $2,070,000, then the $520,000 limit is reduced (but not below zero) dollar-for-dollar by the amount of the excess.

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