IRS Tax Limits going into effect for 2017
The IRS released 2017 adjustments to more than 50 tax provisions as well as providing updated tax rate tables for individuals, estates and trusts (Rev. Proc. 2016-55).¬† These revisions will be used for both tax preparation for 2017 and tax year reporting due in 2018. ¬†The bullets below are highlights from the list that would be of interest to a majority of taxpayers.
¬∑¬†¬†¬†¬†¬†¬†¬† For the standard deduction for married taxpayers filing joint returns increased slightly to $12000, a $100 increase over 2015 and 2016. Single and married taxpayers filing separately will also see a slight increase to $6,350.¬† Heads of household will also see a bump from $9.300 to $9350.
The highest tax bracket of 39.6% saw a moderate increase from $466,950 to $470,700 per year. Single taxpayers are subject to the 39.6% tax rate on income over $418,400, an increase of $3,350 over 2016.
¬∑¬†¬†¬†¬†¬†¬†¬† The maximum earned income tax credit amount for 2017 is $6318 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,268 of 2016.
¬∑¬†¬†¬†¬†¬†¬†¬† The Alternate Minimum Tax exemption amount for tax year for 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).
¬∑¬†¬†¬†¬†¬†¬†¬† FSA Contribution increases from $2550 to $2600, Carryover rates remain the same at $500.
¬∑¬†¬†¬†¬†¬†¬†¬† Transportation accounts which apply to transportation in a commuter highway vehicle and any transit pass continues to be limited to $255 per month. Parking remains at $255 per month.
¬∑¬†¬†¬†¬†¬†¬†¬† Health Savings Accounts will see a $50 increase to a maximum of $3,400 annually. Family contribution limits remain the same for 2017 at $6,750.
¬∑¬†¬†¬†¬†¬†¬†¬† ‚ÄėHigh Deductible Health Plans (HDHP) as defined under 223¬©(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (including deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage and $13,100 for family coverage.‚ÄĚ
The penalty for not having essential health insurance remains at $695.
There are of course, more changes than what‚Äôs posted here, so please talk with us for a more in-depth conversation about your specific tax situation.
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