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 22% (decreased from 25% starting on the January 31, 2018 paycheck).


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).