22 THE QUEENS COURIER • OCTOBER 26, 2017 FOR BREAKING NEWS VISIT WWW.QNS.COM
2018 Pension Plan Contribution Limits are Announced
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JOHN J.
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BY JOHN SAVIGNANO, CPA
The IRS announced on Thursday that
the limit on elective deferral for contributions
to 401(k) plans, 403(b) plans, most
457 plans, and the federal government’s
Thrift Savings Plan will increase from
$18,000 in 2017 to $18,500 for 2018.
However, the catch-up contribution limit
for those 50 and older remains $6,000.
Most other inflation-adjusted amounts
related to pensions increased from 2017
to 2018.
The ability of taxpayers who are covered
by workplace retirement plans to make a
deductible individual retirement arrangement
(IRA) contribution is phased out for
singles and heads of household who have
modified adjusted gross incomes (AGIs)
between $63,000 and $73,000, a slight
increase from last year.
For married couples filing jointly,
where the spouse who makes the IRA
contribution is covered by a workplace
retirement plan, the income phaseout
range is $101,000 to $121,000 for 2018.
These amounts also increased slightly
from 2017. When an IRA contributor is
not covered by a workplace retirement
plan but is married to someone who is,
the deduction is phased out if the couple’s
income is between $189,000 and
$199,000, also an increase from 2017.
For taxpayers making contributions to
Roth IRAs, the phaseout range for determining
the maximum contribution is
$189,000 to $199,000 for married couples
filing jointly and $120,000 to $135,000
for singles and heads of household. These
limits were all increased from 2017.
The AGI limit for the saver’s credit
is $63,000 for married couples filing
jointly, $47,250 for heads of household,
and $31,500 for single taxpayers and for
married individuals filing separately, all
increases from 2017.
IRS Will Enforce Health
Coverage Reporting
on 2017 Returns
On Friday, the IRS updated its page
on health care reporting requirements to
inform taxpayers and tax practitioners
that it will not accept electronically filed
2017 individual income tax returns unless
taxpayers indicate that they and everyone
on their return had health care coverage,
qualified for an exemption from coverage,
or will make a shared-responsibility
payment (under Sec. 5000A). The IRS
also said that any returns filed on paper
that do not address the health coverage
requirements may be suspended until
the Service receives additional information,
and any refund due may be delayed.
This filing season will be the first time
the IRS has enforced this requirement and
will not accept tax returns that omit this
information. Last filing season, President
Donald Trump’s administration issued an
executive order directing the government
to limit any burdens imposed by the
Patient Protection and Affordable Care
Act pending repeal. In response, the IRS
said it would not enforce the health care
reporting requirement on 2016 returns
filed in 2017, although taxpayers were
still required to pay the shared-responsibility
payment if they did not have coverage
or qualify for an exemption.
This year, however, the IRS and the
Taxpayer Advocate Service have determined
that enforcing the rule when taxpayers
file will make return filing easier on
taxpayers and also reduce refund delays.
John Savignano is a partner with
Savignano Accountants & Advisors
located at 47-46 Vernon Blvd.,
Second Floor, in Long Island City.
If you have any questions or require
additional information, please call
John at 718-707-0955.
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