The Internal Revenue Service has published a big new collection of tax parameters for 2019, in Revenue Procedure 2018-57.
This document sets minimums and maximums for everything from cafeteria plan contribution limits to how much the government can claw back from moderate-income workers who get too much government help with paying for individual major medical insurance.
(Related: 9 New 2018 Tax Numbers to Know)
A copy of the full IRS document is available here.
Here’s a look at what happened to 12 parameters (and sets of parameters) of interest to insurance agents and brokers who offer products such as life insurance, health insurance and long-term care insurance.
We pulled the 2018 numbers from IRS Rev. Proc. 2017-58.
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 the 2018 revenue procedure and the 2019 revenue procedure.
If you use these figures in your own professional life, it might be a good idea to start by talking to your own tax and compliance advisors, both to verify the numbers and to make sure you know what you can and can’t tell your clients and prospects.
Numbers for Life Insurance and Estate Planning
1. Unified Credit Against Estate Tax
To $11.4 million for a decedent dying in 2019, from $5.6 million for a decedent dying in 2018.
2. 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 $1.55 million, from $1.52 million.
3. Valuation of Qualified Real Property in the Decedent’s Gross Estate
For 2019, for an executor who chooses to use the special-use valuation method described in Section 2032A of the Internal Revenue Code, the limit on the total decrease in the resulting property value is $1.16 million. That’s up from $1.14 million for 2018.
4. Gift Tax Exclusion
The exclusion for 2019 will be $15,000 for gifts to any person, and $155,000 for gifts to a spouse who is not a citizen of the United States. That compares with 2018 limits of $15,000 for gifts to any person, and $152,000 for gifts to a non-U.S. citizen spouse.
Numbers for Health Insurance and Benefits
5. Cafeteria plans
The dollar limit for voluntary employee salary reductions for contributions to health flexible spending arrangements (FSAs) will increase to $2,700, from $2,650.
6. Medical Savings Accounts
The MSA is the ancestor of the HSA, and of the health reimbursement arrangement.
An MSA holder is supposed to combine high-deductible health coverage with a special savings account.
For 2019, the acceptable deductible ranges will be $2,350 to $3,500 for self-only coverage, and $4,650 to $7,000 for family coverage, For 2018, the acceptable deductible ranges are $2,300 to $3,450 for self-only coverage, and $4,600 to $6,850 for family coverage.