With a new year inevitably comes a whole new crop of tax laws. 2017 is no exception, and there are some pretty noteworthy changes this year that could impact you come tax time. Moreover, with President Elect Donald Trump promising many more tax changes, it could be quite an eventful year for tax changes.
According to the IRS website, the following are some of the more significant changes on the books for 2017:
The standard deduction for married filing jointly increases to $12,700 for tax year 2017. That’s an increase of $100 from 2016. For single taxpayers and married individuals filing separately, the standard deduction increases to $6,350 in 2017, up from $6,300 in 2016, and for heads of households, the standard deduction is $9,350 for tax year 2017, up from $9,300 for 2016.
The personal exemption for tax year 2017 remains the same at $4,050. However, the exemption is subject to a phase-out starting 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). That’s up from $415,050 and $466,950, respectively. The other marginal rates of 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 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). That compares to $53,900 ($83,800 for married couples filing jointly). For 2017, the 28 percent tax rate applies to those with taxable incomes above $187,800 ($93,900 for married individuals filing separately).
For calendar year 2017, the amount used to determine the penalty for not maintaining minimum essential health coverage is $695.
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.
For tax day procrastinators, there’s good news again this year. Because April 15 falls on a Saturday and the Emancipation Day holiday is being observed on April 17, this year’s tax day deadline will be on Tuesday, April 18.
Are you having trouble understanding the new tax laws and how they could impact you or your business? Contact Chicago tax lawyer Patrick T. Sheehan & Associates for help!