2017 IRS AnnouncementsNovember 1, 2016
Small Employers Rejoice – You Can Now Reimburse For Health Insurance again!January 4, 2017
Recently, the IRS issued the annual inflation adjustments for 2017 for more than 50 tax provisions as well as the 2017 tax rate tables for individuals and estates and trusts (Rev. Proc. 2016-55). These provisions are used to file tax year 2017 returns in 2018.
One of the few inflation-adjusted amounts that stayed the same is the personal exemption, which remains $4,050 for 2017. The standard deduction for married taxpayers filing joint returns increases slightly to $12,700, $100 more than in 2015 and 2016. It also increases slightly for single taxpayers and married taxpayers filing separately to $6,350. The standard deduction increases for heads of household, from $9,300 to $9,350.
Under the new tax table, the income level at which married taxpayers filing joint returns are subject to the highest bracket of 39.6% increases from $466,950 in 2016 to $470,700. Single taxpayers are subject to the 39.6% tax rate on income over $418,400, increased from $415,050 in 2016.
The limitation above which itemized deductions may be reduced on 2017 individual tax returns begins for single taxpayers with incomes of $261,500 or for married couples filing jointly with incomes of $313,800.
The maximum earned income tax credit amount for 2017 is $6,318 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,269 for 2016.
One other amount that was unchanged from 2016 is the annual deductible amount for taxpayers who have self-only coverage in a Medical Savings Account. For 2017, the plan must have an annual deductible that is not less than $2,250 but not more than $3,350, unchanged from 2016. Other amounts have increased slightly, however. For self-only coverage, the maximum out-of-pocket expense is $4,500, $50 more than for 2016. For tax year 2017 participants with family coverage, the floor for the annual deductible is $4,500, up from $4,450 in 2016. 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, up from $8,150 for tax year 2016.