Tax Rates, Exemptions, and Limitations

Tax rate Single Head of household
10% Up to $9,325 up to $13,350
15%  $9,326 – $37,950 $13,351 – $50,800
25% $37,951 – $91,900 $50,801 – $131,200
28% $91,901 – $191,650 $131,201 – $212,500
33% $191,651 – $416,700 $212,501 – $416,700
35% $416,701 – $418,400 $416,701 – $444,550
39.60% $418,401 and more $444,551 and more

 

Tax rate MFJ/ Qual. Widow MFS
10% up to $18,650 Up to $9,325
15% $18,651 – $75,900  $9,326 – $37,950
25% $75,901 – $153,100 $37,951 – $91,900
28% $153,101 – $233,350 $91,901 – $191,650
33% $233,351 – $416,700 $191,651 – $416,700
35% $416,701 – $418,400 $416,701 – $418,400
39.60% $418,401 and more $418,401 and more

 

Standard Deduction Amounts

 

The additional standard deduction for people who have reached age 65 (or who are blind) is $1,250 for married taxpayers or $1,550 for unmarried taxpayers.
Single or married filing separately: $6,350
Married filing jointly: $12,700
Head of household: $9,350

 

Limitation on Itemized Deductions
As was the case for the last few years, the amount of itemized deductions which you are allowed to claim is reduced by 3% of the amount by which your adjusted gross income exceeds certain threshold amounts. These threshold amounts are the same as the lower threshold amounts listed above for the personal exemption phaseout (e.g., $261,500 for single taxpayers). However:
1. Your itemized deductions cannot be reduced by more than 80% as a result of this limitation, and
2. Your itemized deductions for medical expenses, investment interest expense, casualty/theft losses, and gambling losses are not reduced as a result of this limitation.

 

AMT Exemption Amount
After adjusting for inflation, the following are the AMT exemptions for 2017:
$54,300 for single taxpayers,
$84,500 for married taxpayers filing jointly, and
$42,250 for married taxpayers filing separately.

 

IRA and 401(k) Contributions Limits
For 2017, the contribution limit to Roth and traditional IRAs is unchanged at $5,500, with an additional catch-up contribution of $1,000 for people age 50 or older.
The contribution limit for 401(k), 403(b), and most 457 plans is unchanged at $18,000, with an additional catch-up contribution of $6,000 for people age 50 or older.
The maximum possible contribution for defined contribution plans (e.g., for a self-employed person with a sufficiently high income contributing to a SEP IRA) is increased to $54,000.

     

Tax Credit Changes

Earned Income Tax Credit (EITC) The maximum EITC amount available is $6,318 for taxpayers filing jointly who have 3 or more qualifying children.

The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds, and phase-outs.

 

Child & Dependent Care Credit The value used to determine the amount of credit that may be refundable is $3,000 (the credit amount has not changed). Keep in mind that this is the value of the expenses used to determine the credit and not the actual amount of the credit.

 

Hope Scholarship Credit The Hope Scholarship Credit for 2017 will remain an amount equal to 100% of qualified tuition and related expenses not more than $2,000 plus 25% of those expenses more than $2,000 but not more than $4,000. That means that the maximum Hope Scholarship Credit allowable for 2017 is $2,500.

 

Lifetime Learning Credit As with the Hope Scholarship Credit, income restrictions apply to the Lifetime Learning Credit. For 2017, the adjusted gross income amount used to determine the reduction in the Lifetime Learning Credit is $56,000 ($112,000 for joint filers).

 

Transportation and Parking Benefits The monthly limitation for the qualified transportation fringe benefit is $255 for transportation in a commuter highway vehicle or any transit pass, as well as qualified parking.

 

Medical Savings Accounts The term “high deductible health plan” means, for participants who have self-only coverage in a Medical Savings Account, an annual deductible that is not less than $2,250 but not more than $3,350. For self-only coverage, the maximum out of pocket expense amount is $4,500. For 2017, the term “high deductible health plan” means, for participants with family coverage, an annual deductible that is not less than $4,500 but not more than $6,700. For family coverage, the maximum out of pocket expense is $8,250.

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