The IRS adjusts dollar limitations on benefits, contributions, and other employee benefit plan limits each year based on inflation.

So what exactly has changed for 2016?

Most amounts have not changed for this year, but you will note a few adjustments in certain areas.

Important Tax Figures for 2016  
Social Security/Medicare20162015
Social Security Tax Wage Base$118,500$118,500
Medicare Tax Wage BaseNo limitNo limit
Employee portion of Social Security6.2%6.2%
Individual Retirement Accounts20162015
Roth IRA Individual, up to 100% of earned income$5,500$5,500
Traditional IRA Individual, up to 100% of earned Income$5,500$5,500
Roth and traditional IRA additional annual "catch-up" contributions for account owners age 50 and older$1,000$1,000
Qualified Plan Limits20162015
Defined Contribution Plan limit on additions on Sections 415(c)(1)(A)$53,000$53,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))$210,000$210,000
Maximum compensation used to determine contributions$265,000$265,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2))$18,000$18,000
401(k), 403(b), 457 & SARSEP additional "catch-up" contributions for employees age 50 and older$6,000$6,000
SIMPLE deferrals (Section 408(p)(2)(A))$12,500$12,500
SIMPLE additional "catch-up" contributions for employees age 50 and older$3,000$3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B))$120,000$120,000
Compensation defining key employee (officer)$170,000$170,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))$600$600
Driving Deductions20162015
Business mileage, per mile54 cents57.5 cents
Charitable mileage, per mile14 cents14 cents
Medical and moving, per mile19 cents23 cents
Business Equipment20162015
Maximum Section 179 deduction$500,000$500,000
Phaseout for Section 179$2,000,000$2,000,000
Transportation Fringe Benefit Exclusion20162015
Monthly commuter highway vehicle and transit pass$255$255
Monthly qualified parking$255$250
Standard Deduction20162015
Married filing jointly$12,600$12,600
Single (and married filing separately)$6,300$6,300
Heads of Household$9,300$9,250
Personal Exemption20162015
Amount$4,500$4,000
Personal Exemption Phaseout20162015
Married filing jointly and surviving spousesBegins at $311,300Begins at $309,900
Heads of HouseholdBegins at $285,350Begins at $284,050
Unmarried individualsBegins at $259,400Begins at $258,250
Married filing separatelyBegins at $155,650Begins at $154,950
Domestic Employees20162015
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.$1,900$1,900
Kiddie Tax20162015
Net unearned income not subject to the "Kiddie Tax"$2,100$2,100
Estate Tax20162015
Federal estate tax exemption$5.45 million$5.43 million
Maximum estate tax rate40%40%
Annual Gift Exclusion20162015
Amount you can give each recipient$14,000$14,000

Questions? Contact any member of our Tax Services Team.