Strong Wealth Management

2018 TAX REFERENCE GUIDE

Qualified Retirement Plans

Traditional IRA Contribution Limits

Under Age 55

$5,500

Age 50 and Older

$6,500

Phase-out range for IRA contribution deductibility

Married and filing jointly.

$98,000 - $116,000 MAGI
(if you are covered by plan at work)
$183,000 - $193,000 MAGI
(if your spouse is covered by a plan
at work and you are not)

Married, filing separately

Single and head of household

$0 - $10,000 MAGI
(if you or your spouse is covered by
a plan at work)

$61,000 - $71,000 MAGI (if you are covered by plan at work)

Full deduction is permitted below the phase-out range. Scaled partial deduction permitted within range. No deduction permitted above range. Anyone under age 70 1/2 with earned income can make a fully deductible contribution, regardless of MAGI, if neither he/she nor the spouse is an active participant in an employer plan. if one or both are active plan participants, the above phase-out
ranges apply. Qualified clients not eligible for deductible contributions may make nondeductible contributions up to the annual limit

Roth IRA Contribution Limits

Under Age 50

$5,500

Age 50 and Above

$6,500

Phase-out range for IRA contribution deductibility

Married and filing jointly.

$183,000 - $193,000 MAGI

Married, filing separately

$0 - $10,000 MAGI
(if you or your spouse is covered by
a plan at work)

Single and head of household

$116,000 - $130,000 MAGI

Defined Benefit Plan

Contributions calculated using actuarial assumptions, are targeted to provide an annual benefit up to the lesser of $210,000 or 100% of the participant's average compensation for three highest consecutive calendar years of active participation.

SEP IRA Contribution Limits

  • Discretionary employer contributions up to the lesser of $53,000 or 25% of compensation (or 20% of net earnings from self-employment).
  • Max compensation cap of $265,000.
  • Minimum of $600 in compensation required.

401(k), 403(b), 457, SARSEP contribution limits

Age 55 and Under

Age 55 and Above

$18,000

$24,000

  • $53,000 or 100% of compensation with a $265,000 compensation cap.
  • 401(k) and profit-sharing plans may be combined, but share a single limit.

Simple IRA Salary Deferral Contributions

Under Age 55

$12,500

Age 55 and Above

$15,500

To participate must earn at least $5,000 in compensation during any 2 years before the current calendar year end and expect to receive at least $5,000 during the current calendar year.

Distributions made within the first 2 years of participation are subject to a 25% additional early distribution tax penalty instead of the standard 10%.

Saver's Tax Credit

Single taxpayers and married filing separately with MAGI below $30,500, heads of household with MAGI below $45,750 and joint filers with MAGI below $61,000 may be eligible for a tax credit for an IRA, 401(k), 403(b) or457 employee plan contribution.

Educational Accounts

Section 529 College Savings Plan Account

Prepaid Tuition Plans let you pre-pay all or part of the costs of an in-state public college education. They may also be converted for use at private and out-of-state colleges. The Private College 529 Plan is a separate prepaid plan for private colleges.

Educational institutions can offer a prepaid tuition plan but not a college savings plan.

Coverdell Education Savings Account

Beneficiaries under age 18 and
special needs beneficiaries of any
age (maximum contribution)

$2,000

Phase-out ranges for Coverdell ESA contribution eligibility

Single

Married, filing jointly

$95,000- $110,000 MAGI

$190,000 - $220,000 MAGI

HSA Contribution Plan Limits

HSA Limits

The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for high deductible health plans (HDHPs) for 2015, as well as the maximum annual HSA contribution.

Minimum Maximum Out-of-Contribution Limit 55+ Contribution Deductible Pocket*

Minimum

Maximum

Out-of-Contribution Limit

+55

Contribution Deductible Pocket*

Single

Family

$1,300

$2,600

$6,450

$12,900

$3,350

$6,650

$1,000

$1,000

*These limits do not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limits apply.

  • To be an eligible individual and qualify for an HSA, you must:
    be covered under an HDHP on the first day of the month,
  • not be enrolled in Medicare benefits, and have no other health coverage*,
  • not be claimed as a dependent on someone else's tax return

For more detailed information on FISAs and taxes, visit the U.S. Department of Treasury Web site at www.ustreas.gov or talk with your tax advisor.

Federal Income Tax Brackets & Rates

Federal Income Tax