Selected 2011 Inflation-Adjusted Tax Figures

Each year new tax rate bracket amounts, deduction limitations, exemptions and other items are adjusted to reflect inflationary increases.  The Tax Code now requires over 50 inflation-driven computations to determine deduction, exemption and exclusion amounts.  In addition, many items have built-in statutory changes enacted under previous tax legislation.  Due to nominal inflation during the 12-month measuring period, most of the amounts have not changed from 2010.  Some of the more important 2011 tax figures announced by the Federal Government or estimated by the Research Institute of America (RIA) are the following.

• The Social Security wage base is $106,800 (the same as 2010)
• The personal exemption is $3,700 (up from $3,650 in 2010)
• The IRA contribution limit is $5,000 with a $1,000 "catch-up" for those age 50 or older (the same as 2010)
• The Roth IRA contribution phases out for modified adjusted gross income between $169,000 and $179,000 (up from $167,000 to $177,000 in 2010) for joint tax returns, and between $107,000 and $122,000 (up from $105,000 and $120,000) for single and head of household filers
• Note that the Roth IRA conversion income limit does not apply any more after 2009
• The 401(k) plan deferral limit is $16,500 with a $5,500 "catch-up" for those age 50 or older (the same as 2010)
• The annual limit on additions to defined contribution plan accounts is $49,000 (the same as 2010)
• The annual gift tax exclusion is $13,000 (same as 2010)

Information regarding 2011 tax figures for the following items remain uncertain.  These are items that could change depending upon whether or what portions of the Bush tax cuts of 2001 and 2003 that expire on 12/31/2010 are extended into 2011 and/or what portions of the Obama budget proposals are adopted.

• Income tax rate brackets
• Overall limitation on itemized deductions
• Phase-out limitation on personal exemptions
• Estate tax exemption amount and tax rate
• Alternative minimum tax exemption amount