Tax Benefit Adjustments in 2018

5 IRS tax benefit adjustments you'll want to know about in 2018

Kevin McCoy, USA TODAY

If you search the IRS website for tax forms, you'll get over 900 results. Here are the ones you need to know. Walbert Castillo, Ramon Padilla, Karl Gelles, USA TODAY

INTERNAL REVENUE SERVICE

(Photo: J. David Ake, AP)

It's probably never too early for U.S. taxpayers to start planning for changes in federal tax provisions.

Although Americans won't start filing their tax returns for 2017 earnings until early next year, the IRS has already issued changes for deductions and exemptions on 2018 earnings that taxpayers will report on the nearly 155.5 million tax returns they're expected to file in 2019.

The IRS changes are based on current federal law and are set based on economic and actuarial projections. Keep in mind that the provisions could shift as the Trump administration seeks approval of the largest federal tax overhaul in decades.

Here are five changes the IRS says are of greatest interest to most taxpayers:

Standard deduction

The standard deduction for married couples who file joint tax returns rises to $13,000 for the 2018 tax year, a $300 increase. For single taxpayers and married individuals who file separately, the standard deduction rises to $6,500, up from $6,350.


File photo shows image of IRS Form 1040 tax return (Photo: Getty Images)

Personal exemption

The personal exemption for the 2018 federal tax year rises $100, to $4,150. The exemption is subject to a phase-out that begins with adjusted gross incomes of $266,700 for individuals, or $320,000 for married couples who file jointly.

Itemized deductions

The limit for itemized deductions to be claimed on returns for the 2018 tax year starts with incomes of $266,700 for individuals and $320,000 for married couples who file jointly.


Photo taken in 2016 shows what nearly all Americans want from the IRS: a refund. 
(Photo: michaelquirk, iStockphoto)

Alternative minimum Tax

For individuals, the alternative minimum tax exemption amount for the 2018 tax year is $55,400 and begins to phase out at $123,100. For married couples who file jointly, the exemption amount is $86,200, and the exemption begins to phase out at $164,100.

Retirement plan limitations

The annual contribution limit rises to $18,500, a $500 jump, for employees who participate in 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan.