Estate, Gift, Income Tax Amounts Increased for 2019

The IRS announced the annual inflation increases for various tax provisions as of January 1, 2019.The lifetime estate and gift tax exemption has been increased to $11.4million (from $11.18 million). A couple can jointly exclude $22.8 million.

The annual gift tax exclusion remains$15,000 for 2019.The standard deduction for married couples filing jointly is $24,400 (up from $24,000). For single taxpayers, itis $12,200 (up from $12,000). Remember, the personal exemption amount was eliminated for years after 2017.

The top tax rate of 37% begins for married couples filing jointly with taxable incomes exceeding $612,350($510,300 for singles). The 24% bracket begins with taxable income of $168,400 for married couples ($84,200for singles). The 22% tax rate begins with taxable income of $78,950 for couples ($39.475 for singles).

The annual tax-deferred contribution to 401(k) and similar plans is increased to $19,000 from $18,500.The catch-up contribution for those ages 50 and older remains at $6,000.Total contributions to 401(k) plans are limited to $56,000 ($55,000 in 2018).

The IRA contribution limit has increased to $6,000 from $5,500. The contribution limit is the same for traditional and Roth IRAs. If you contribute to both types of IRAs, the aggregate contributions can’t exceed $6,000.