JANUARY UPDATE: The Tax Cuts and Job Act was signed into law December 22, 2017. The new legislation requires significant changes to the tax calculations in the software, which will impact the timeline for the 2018 tax update. The tax changes are the top priority for the software and development is underway.
The IRS announced tax adjustments for inflation for the 2018 tax year. This year marks the fifth year of straightforward tax changes primarily made up of adjustments due to indexing for inflation. Income tax brackets were adjusted upwards.
The personal exemption increased to $4,150, up $100 from 2017. The standard deduction amounts were increased for 2018, to $6,500 for single taxpayers and $13,000 for married filing jointly. The AMT exemption amount was increased from $54,300 to $55,400 for single taxpayers and from $84,500 to $86,200 for married filing jointly taxpayers in 2018. The estate tax exemption grew by $40,000 per person to $5,600,000. Additionally, the annual exclusion for gifts was increased to $15,000, after remaining unchanged at $14,000 since 2013.
Of course, all of this could change if a tax reform bill passes.
UPDATE: The tax reform bill did pass and was signed into law on December 22nd.
For more details, view Revenue Procedure 2017-58.
The 2018 tax updates to your financial planning software will include updated income tax calculations, estate tax calculations and Social Security estimates. The update will be available in January of 2018*.
*UPDATE: The Tax Cuts and Job Act was signed into law December 22, 2017. The new legislation requires significant changes to the tax calculations in the software, which will impact the timeline for the 2018 tax update. The tax changes are the top priority for the software and development is underway.
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