As anyone could imagine, the hottest topic in wealth planning right now is trying to decipher the impacts of the Tax Cuts and Jobs Act Of 2017.  I am currently working on a summary of the tax legislation which I will publish later this month.  But for now, I think that it is prudent to focus on some other key facts and dates from a tax perspective as we start this new year.

Bottom line, there aren’t a whole lot of significant changes from a contribution limit standpoint from 2017 to 2018.  You will see in bold below where there were slight changes.  One specific point of emphasis that I make every year is regarding 401k contributions.  I really encourage people to contribute enough to receive their company match if their company offers one.  Matches can vary greatly by company but usually range between 3% and 6%.  Ensuring that your own contributions meet the qualifications, it is essentially receiving free money.

Qualified Dividend and Long-Term Capital Gains Rates:

• 0%: Single taxpayers with incomes between $0 and $38,600; married couples filing jointly with incomes between $0 and $77,200.
• 15%: Single taxpayers with incomes between $38,600 and $425,800; married couples filing jointly with incomes between $77,200 and $479,000.
• 20%: Single taxpayers with incomes over $425,800; married couples filing jointly with incomes over $479,000.

Medicare Surtax: As in years past, an additional 3.8% Medicare surtax will apply to the lesser of net investment income or the excess of modified adjusted gross income over $200,000 for single taxpayers and $250,000 for married couples filing jointly.

IRA contribution limits (Roth or traditional): $5,500 under age 50/$6,500 over age 50.  No change from 2017.

Income limits for deductible IRA contribution, single filers or married couples filing jointly who aren’t covered by a retirement plan at work: None; fully deductible contribution.

Income limits for deductible IRA contribution for filers covered by a retirement plan:

• Single: Modified adjusted gross income under $63,000–fully deductible contribution; between $63,000 and $73,000–partially deductible contribution; more than $73,000–contribution not deductible.
• Married: Modified adjusted gross income under $101,000–fully deductible contribution; between $101,000 and $121,000–partially deductible contribution; more than $121,000–contribution not deductible.

Income limits for nondeductible IRA contributions: None.

Income limits for IRA conversions: None, but note that the tax legislation eliminated the opportunity to recharacterize a Roth IRA as a traditional IRA, or vice versa.

Income limits for Roth IRA contribution:

• Single: Modified adjusted gross income under $120,000–full Roth contribution; between $120,000 and $135,000–partial Roth contribution; more than $135,000–no Roth contribution.
• Married couples filing jointly: Modified adjusted gross income under $189,000–full Roth contribution; between $189,000 and $199,000–partial Roth contribution; more than $199,000–no Roth contribution.

Contribution limits for 401(k), 403(b), 457 plans, or self-employed 401(k) (traditional or Roth): $18,500 under age 50; $24,500 for age 50 and older.  Increase of $500 from 2017.

Total 401(k) contribution limits, including employer (pretax, Roth, after-tax) and employee contributions and forfeitures: $55,000 if under age 50; $61,000 if 50-plus.  Increase of $1,000 from 2017.

SEP IRA contribution limit: The lesser of 25% of compensation or $55,000.  Increase of $1,000 from 2017.

Health savings account contribution limits:

• Single: $3,450 (under 55); $4,450 (over 55).  Increase of $50 from 2017.
• Family: $6,900 (contributor under 55); $7,900 (contributor 55-plus).  Increase of $150 from 2017.

High-deductible health plan out-of-pocket maximum, self-only coverage: $6,650.  Increase of $100 from 2017.

High-deductible health plan out-of-pocket maximum, family coverage: $13,300.  Increase of $200 from 2017.

Section 529 college-savings account contribution limit: Per IRS guidelines, contributions cannot exceed amount necessary to provide education for beneficiary. Deduction amounts vary by state, and those contributing very large amounts may have to file a gift tax form. Section 529 college savings account income limit: None.

Estate Tax, Gift, Generation-Skipping Tax: The new tax laws greatly increase the lifetime exclusion amount to $11.2 million through 2025; couples receive an exclusion that’s double that amount, or more than $22 million.

2018: Important Tax Dates to Remember

Jan. 1: New IRA, retirement plan, and HSA contribution and income limits went into effect for 2018 tax year, as listed above.

Jan. 16: Estimated tax payments due for fourth quarter of 2017.

April 17: Individual tax returns (or extension request forms) due for 2017 tax year.

• Estimated tax payments due for first quarter of 2018.
• Last day to contribute to IRA for 2017 tax year (2017 contribution limits: $5,500 under age 55; $6,500 for age 55 and above).
• Last day to contribute to health savings account for 2017 tax year (2017 contribution limits: $3,400 for single coverage, contributor under age 55; $4,400 for single coverage, contributor age 55 and above; $6,750 for family coverage, contributor under age 55; $7,750 for family coverage, contributor age 55 and above).

June 15: Estimated tax payments due for second quarter of 2018.

Sept. 17: Estimated tax payments due for third quarter of 2018.

Oct. 15: Individual tax returns due for taxpayers who received a six-month extension.

Dec. 31: Retirees age 70 1/2 and older must take required minimum distributions from traditional IRAs and 401(k)s; those RMDs are based on their balances at the end of 2017. Last date to make contributions to company retirement plans (401(k), 403(b), 457) for 2018 tax year.