The Tax Code requires that federal income tax brackets and certain other figures be adjusted for inflation annually. Wolters Kluwer has projected the 2018 standard deduction, tax bracket amounts and other inflation-adjusted tax figures based on the relevant inflation data just released by the U.S. Department of Labor (DOL).
Comment. These projections reflect current law. Tax reform legislation may change some of these amounts. Inflation-adjusted amounts, however, are expected to be built into any changes as well.
Key figures. Key projected inflation-adjusted tax amounts that have increased for 2018 include:
- The personal exemption for 2018 will rise $100 from its 2017 level, to $4,150.
- The top 39.6 percent bracket will start at: $480,050 for married joint filers (up from $470,700); $453,350 for heads of household (up from $444,550); $424,950 for unmarried filers (up from $418,400); $240,025 for married separate filers (up from $235,350); and $12,700 for estates and trusts (up $12,500 from 2017).
- Filers subject to the alternative minimum tax (AMT) will see their exemption amounts increase: $86,200 for married joint filers (up from $84,500); $55,400 for unmarried filers (up from $54,300); $43,100 for married separate filers (up from $42,250); and $24,600 for estates and trusts (up from $24,100).
- The annual gift tax exclusion will increase from $14,000 to $15,000 per donee in 2018.