- For 2018, the standard deduction for a single individual is $12,000 and for a married couple is $24,000. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes) AND real estate taxes limited to $10k per year, mortgage interest, charitable contributions, and medical expenses in excess of 7.5% of income in 2018 and 10% of income after that.
- Starting in 2018, personal exemptions are no longer deductible.
- The maximum earnings subject to social security taxes is $128,400 for 2018, increasing to $132,900 in 2019.
- The standard mileage rate is $.545 per business mile as of January 1, 2018, up from $.535 for 2017.
- The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $18,500 in 2018, increasing to $19,000 in 2019. And if you’ll be 50 or older by December 31st, you can contribute an extra $6,000 into your 401(k) or 403(b) account this year.
The maximum annual contribution to your IRA is $5,500 for 2015 through 2018, increasing to $6,000 in 2019. And if you turn 50 by December 31st, you can contribute an extra $1,000 that year. You have until April 15, 2019 to make your 2018 IRA contributions.