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Charles S. Wilson, CPA/CFF, CGMA

Charles Wilson, LLC

 

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2017 Tax Benefits Increase Slightly Due to Inflation Adjustments + Consumer Alerts on Tax Scams


2017 Tax Benefits Increase Slightly Due to Inflation Adjustments & Some Unchanged
 

The 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:

> The 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.

> The 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.

> The 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).

> The 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,

> For calendar year 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

> 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.

> Estates 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 Tax Scams

Please 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 media channels.

 

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.

Don't hesitate to call us if you 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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As always you can call our offices if you have any questions about these or any other accounting, tax, financial planning or Quickbooks related issues, at 281-993-4530. 

 

Regards, Charles S. Wilson, CPA/CFF, CGMA

Certified Public Accountant

 

 

       
   
       
 
       

       

Charles S. Wilson, CPA/CFF, CGMA | Charles Wilson, LLC | 307 S. Friendswood Dr, Ste B-2
Friendswood, TX 77546 | 281-993-4530 (O) | 866-567-3975 (F) | charlie@wilsonaccounting.net