New Retirement Plan Contribution and Gifting Guidelines in Effect for 2018 | SJS Investment Services
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New Retirement Plan Contribution and Gifting Guidelines in Effect for 2018

November 13, 2017
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The start of a new year often means new retirement account contribution guidelines from the IRS, and 2018 is no exception. Periodically, the change in the cost-of-living index meets the statutory thresholds to trigger an IRS adjustment. Those who contribute to many common types of retirement plans, including 401(k) and 403(b) plans, may be able to contribute an additional $500 to their plans in 2018. However, IRA contribution and catch-up limits will remain unchanged for calendar year 2018.

Annual gifting limits also are slated to increase from $14,000 to $15,000 in 2018. This means that an individual may gift up to $15,000 to another individual without triggering gift tax.

Please feel free to contact us with any questions you may have about your particular accounts or gifting plans – that’s why we’re here! You can also peruse the full documents at IRS.gov, but we’ve highlighted the major changes below for your convenience.

IRS Guidelines for Contributions 2018

  2017 limit 2018 limit Change?
Elective contribution limit for most employees who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan $18,000 $18,500 $500
Catch-up contribution limit for employees aged 50+ who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan $6,000 $6,000 No change
Limit on annual contributions to an IRA (traditional or Roth) $5,500 $5,500 No change
Additional IRA catch-up contribution limit for those 50+ $1,000 $1,000 No change
Annual gift exclusion $14,000 $15,000 $1,000

                                                                                                            Source: https://www.irs.gov

SJS Investment Services does not provide tax advice; please consult your tax professional for specific advice. This material has been prepared for informational purposes only.