Each year, the IRS calculates cost of living and inflation adjustments and determines how much certain limits and thresholds should be adjusted, if at all, for the upcoming tax year. The IRS released Revenue Procedure 2015-53 earlier this week setting the inflation adjustments for 2016. The IRS also announced the 2016 pension plan limitations this week. The numbers just released apply to the 2016 calendar year (for returns filed in 2017).

There is very little adjustment to the limits or thresholds this year. For the most part, the retirement plan limitations did not change because the cost-of-living adjustment did not meet the statutory thresholds to trigger adjustment. Some of the most frequently discussed limits for 2016 are:

• Estates of deceased individuals dying in 2016 will have a basic exclusion amount of $5,450,000 (up from $5,430,000)
• The annual exclusion for gifts will remain at $14,000 for another year
• Limits on employee contributions to 401(k), 403(b), and 457 plans remain the same at $18,000
• Limits on contributions to traditional and Roth IRAs remain the same at $5,500
• Standard deduction increases for heads of household from $9,250 to $9,300; other standard deductions are unchanged from 2015 ($6,300 for singles or married filing separate, and $12,6000 for married filing joint)
• Personal exemption amount increases from $4,000 to $4,050

The Revenue Procedure also has the tax bracket breakdown for each filing group. If you would like a refresher on the current limits and thresholds for 2015, see last year’s post.