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October 19, 2017 at 02:35 PM
The Internal Revenue Service has published a big new collection of tax parameters for 2018, in Revenue Procedure 2017-58.
Even financial professionals who do their best to keep as much room between themselves and tax questions as possible may find themselves hunting for the revenue procedure document over and over, just to try to find just what, for example, the maximum possible exclusion for long-term care insurance premiums will be for a 55-year-old will be in 2018.
Here’s a look at what happened to nine parameters of interest to advisors, insurance agents and brokers who offer products such as life insurance, annuities, group health plans and long-term care insurance.
The new numbers come from this new parameters document (which is a copyright-free document published by IRS).
The earlier numbers come from the previous IRS parameters document.
(Related: It’s 2017. The IRS Just Changed Your Clients’ Tax Brackets)
The IRS lists William Ruane, an official in the Office of the Associate Chief Counsel for Income Tax and Accounting, as the principal author for both documents.
Of course, when in doubt, if you are not a tax professional yourself, triple check the numbers given here, and use the underlying documents mainly to support communications with your own compliance advisors.
Numbers for everyone
1. The Standard Deduction
Married individuals filing joint returns, and surviving spouses: Increased to $13,000, from $12,700.
Heads of households: Increased to $9,550, from $9,350.
Unmarried individuals (other than surviving spouses and heads of households): Increased to $6,500, from $6,350.
Married individuals filing separate returns: Increased to $6,500, from $6,350.
Numbers for life insurance and estate planning
2. Unified Credit Against Estate Tax
To $5.6 million for a decedent dying in 2018, from $5.49 million for a decedent dying in 2017.
3. Interest on a Certain Portion of the Estate Tax Payable in Installments
The dollar amount used to determine the “2% portion,” for calculating interest, will increase to $1.52 million, from $1.49 million.
(Image: Thinkstock)
4. Gift Tax Exclusion
