2017 Tax Benefits Increase
Slightly Due to Inflation Adjustments & Some Unchanged
Internal Revenue Service announced the tax year 2017 annual
inflation adjustments for more than 50 tax provisions,
including the tax rate schedules, and other tax changes.
Revenue Procedure 2016-55 provides details about these
annual adjustments. The tax year 2017 adjustments generally
are used on tax returns filed in 2018.
> The tax
items for tax year 2017 of greatest interest to most taxpayers
include the following dollar amounts:
standard deduction for married filing jointly rises to $12,700
for tax year 2017, up $100 from the prior year. For single
taxpayers and married individuals filing separately, the
standard deduction rises to $6,350 in 2017, up from $6,300 in
2016, and for heads of households, the standard deduction will
be $9,350 for tax year 2017, up from $9,300 for tax year 2016.
personal exemption for tax year 2017 remains as it was for
2016: $4,050. However, the exemption is subject to a phase-out
that begins with adjusted gross incomes of $261,500 ($313,800
for married couples filing jointly). It phases out completely
at $384,000 ($436,300 for married couples filing jointly.)
For tax year 2017, the 39.6 percent tax rate affects single
taxpayers whose income exceeds $418,400 ($470,700 for married
taxpayers filing jointly), up from $415,050 and $466,950,
respectively. The other marginal rates – 10, 15, 25, 28, 33
and 35 percent – and the related income tax thresholds for tax
year 2017 are described in the revenue procedure.
limitation for itemized deductions to be claimed on tax year
2017 returns of individuals begins with incomes of $287,650 or
more ($313,800 for married couples filing jointly).
Alternative Minimum Tax exemption amount for tax year 2017 is
$54,300 and begins to phase out at $120,700 ($84,500, for
married couples filing jointly for whom the exemption begins
to phase out at $160,900). The 2016 exemption amount was
$53,900 ($83,800 for married couples filing jointly). For tax
year 2017, the 28 percent tax rate applies to taxpayers with
taxable incomes above $187,800 ($93,900 for married
individuals filing separately).
> The tax
year 2017 maximum Earned Income Credit amount is $6,318 for
taxpayers filing jointly who have 3 or more qualifying
children, up from a total of $6,269 for tax year 2016. The
revenue procedure has a table providing maximum credit amounts
for other categories, income thresholds and phase-outs.
> For tax
year 2017, the monthly limitation for the qualified
transportation fringe benefit is $255, as is the monthly
limitation for qualified parking,
calendar year 2017, the dollar amount used to determine the
penalty for not maintaining minimum essential health coverage
> For tax
year 2017 participants who have self-only coverage in a
Medical Savings Account, the plan must have an annual
deductible that is not less than $2,250 but not more than
$3,350; these amounts remain unchanged from 2016. For
self-only coverage the maximum out of pocket expense amount is
$4,500, up $50 from 2016. For tax year 2017 participants with
family coverage, the floor for the annual deductible is
$4,500, up from $4,450 in 2016, however the deductible cannot
be more than $6,750, up $50 from the limit for tax year 2016.
For family coverage, the out of pocket expense limit is $8,250
for tax year 2017, an increase of $100 from tax year 2016.
> For tax
year 2017, the adjusted gross income amount used by joint
filers to determine the reduction in the Lifetime Learning
Credit is $112,000, up from $111,000 for tax year 2016.
> For tax
year 2017, the foreign earned income exclusion is $102,100, up
from $101,300 for tax year 2016.
of decedents who die during 2017 have a basic exclusion amount
of $5,490,000, up from a total of $5,450,000 for estates of
decedents who died in 2016.
Consumer Alerts on
note that the IRS does not initiate contact with taxpayers by
email to request personal or financial information.
This includes any type of
electronic communication, such as text messages and social
Note that the IRS will never:
Call to demand immediate payment using a specific payment
method such as a prepaid debit card, gift card or wire
transfer. Generally, the IRS will first mail you a bill if you
owe any taxes.
Threaten to immediately bring in local police or other
law-enforcement groups to have you arrested for not paying.
Demand that you pay taxes without giving you the opportunity
to question or appeal the amount they say you owe.
Ask for credit or debit card numbers over the phone.
Examples of recent scams include:
Fake IRS tax bills related to the Affordable Care Act.
Generally, the scam involves a fraudulent version of CP2000
notices for tax year 2015. See more.
Telephone scammers targeting students and parents during the
back-to-school season and demanding payments for non-existent
taxes, such as the "federal student tax." See more.
"Robo-calls" where scammers leave urgent callback requests
through the phone telling taxpayers to call back to settle
their "tax bill." In the latest trend, IRS impersonators
demand payments on iTunes and other gift cards. See more.
For more information on tax scams, please see Tax
Scams/Consumer Alerts at www.irs.gov. For more information on
phishing scams, please see Suspicious e-Mails and Identity
Theft at www.irs.gov.
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need help or want to
get started on tax planning for the remainder of 2016 or for
2017 already! If you have comments or questions on the information in these
articles, as usual feel free to call our offices.
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