Rates and Limits


FICA Limits

The 2018 social security wage base is $128,700, up from $127,200 in 2017. The social security tax rate for employees is 6.2% and the employer portion remains the same at 6.2%. The maximum social security tax employees pay in 2018 is $7,979.40 and the employers pay is $7,979.40, both up from $7,886.40 in 2017.


Qualified Transportation Expenses

IRS Section 132(f) limitations on excludable income for transportation fringe benefits that may be excluded from employee's income, federal employment taxes, FIT, FICA and FUTA are:

  • $260.00 for van pools/car pooling /mass transit/bus passes
  • $260.00 for parking

Personal Income Tax

The 2018 standard deduction will be:

  • $6,500 for single taxpayers
  • $13,000 for married taxpayers filing jointly
  • $9,550 for heads of households
The supplemental wage taxation percentage is 25%.


Standard Mileage Rates

The IRS issued documentation giving the optional mileage rates for use in computing the deductible costs of operating an automobile for business and other purposes.

  • Business Mileage Rate – 54.5 cents per mile
  • Medical Care or Moving Expenses – 18 cents per mile
  • Deduction for Charitable Use of an Automobile – 14 cents per mile

Medicare

There is no limit to the wages subject to the Medicare tax. All covered wages are subject to a 1.45% tax. For employees' wages over $200,000, the tax increases by 0.9% to 2.35%.

 

Adoption

The adoption expense exclusion from employee income in employer-provided qualified adoption program in 2018 is $13,840, increased from $13,570 in 2017.

 

Internal Revenue Code Annual Limits on 401(k) Plan Compensation and Contributions

  • The limit on combined pre-tax and Roth after-tax contributions in 2018 is $18,500, an increase from $18,000 in 2017.
  • The limit on catch-up contributions for individual age 50 or older is $6,000.
  • The limit on total employee plus employer contributions, i.e. “annual additions,” is $55,000 (excluding catch-up contributions).
  • The limit on compensation used for calculating employer match and employer contributions is $275,000 (or $400,000 if first participated in the plan prior to 1/1/96).