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2017 inflation adjustments effects on tax deductions, exemptions and limitations

2017 tax rates, income brackets inflation adjustments

It's that special tax time of year, when the Internal Revenue Service releases its annual inflation adjustments for more than 50 tax provisions.

Inflation_blackboardThis is the first in a series on the 2017 tax year inflation adjustments. Links to the other posts are at this end of this article.

For 2017, the total is 55 amounts changes, ranging from the widely used tax rate tables and income brackets and standard deduction and exemption amounts to the more arcane treatment of dues paid to agricultural or horticultural groups and the tax on arrow shafts.

As much fun as it would be to blog about the $162 exemption on agronomic assessments and 50 cent per shaft arrow tax, I'm going to stick with the more widely use adjustments, at least for the foreseeable future.

And the first item is the 2017 tax rates and income amounts that they cover.

2016 tax rates and income brackets: Thankfully, Congress didn't fiddle with tax rates, so we have the same seven in 2017, starting at 10 percent and topping out at 39.6 percent.

But the income that falls into each rate for the five filing statuses has been bumped up a bit for inflation.

Here are those new amounts for the coming tax year:

2017 tax rates and income brackets

Tax Rate Single  Head of Household Married Filing Jointly
or Surviving Spouse
Married Filing Separately
10%  Up to $9,325   Up to $13,350   Up to $18,650   Up to $9,325
15% $9,326 to $37,950   $13,351 to $50,800   $18,651 to
$75,900
  $9,326 to $37,950
25% $37,951 to $91,900   $50,801 to $131,200   $75,901 to $153,100   $37,951 to $76,550
28% $91,901 to $191,650   $131,201 to $212,500   $153,101 to $233,350   $76,551 to $116,675
33% $191,651 to $416,700   $212,501 to $416,700   $233,351 to $416,700   $116,676 to $208,350
35% $416,701 to $418,400   $416,701 to $444,550   $416,701 to $470,700   $208,351 to $235,350
39.6% $418,401
or more
  $444,551
 or more
  $470,701 
 or more
  $235,351 
 or more

 

There's one important thing to note about the information in the above table. It applies to the 2017 tax year that begins on Jan. 1, 2017. You'll use these numbers when you file your 2017 taxes in 2018.

Do not -- I repeat, do not -- use the above table for filling your 2016 tax return, which you'll do next year during what will be referred to by the IRS, me and all my colleagues who cover taxes, as the 2017 filing season.

Yeah, I know, the tax terminology is as, if not more, confusing as the tax lows and filing process.

2016 tax rates and income brackets: To file your 2016 return, which is due by April 17, 2017 (yep, another later deadline since April 15 next year falls on a Saturday), you'll use the 2016 tax rates and income brackets, shown below:

2016 tax rates and income brackets

Tax Rate Single  Head of Household Married Filing Jointly
or Surviving Spouse
Married Filing Separately
10%  Up to $9,275   Up to $13,250   Up to $18,550   Up to $9,275
15% $9,276 to $37,650   $13,251 to $50,400   $18,551 to
$75,300
  $9,276 to $37,650
25% $37,651 to $91,150   $50,401 to $130,150   $75,301 to $151,900   $37,651 to $75,950
28% $91,151 to $190,150   $130,151 to $210,800   $151,901 to $231,450   $75,951 to $115,725
33% $190,151 to $413,350   $210,801 to $413,350   $231,451 to $413,350   $115,726 to $206,675
35% $413,351 to $415,050   $413,351 to $441,000   $413,351 to $466,950   $206,676 to $233,475
39.6% $415,051
or more
  $441,001
 or more
  $466,951 
 or more
  $233,476
 or more

 

But we do need the 2017 tax year data so that, in addition to working on our 2016 returns, we can make tax moves and plans related to the 2017 tax year.

And if you're interested in more tax year data, the ol' blog's special page lets you look back at tax rates and income brackets through the years.

Enjoy the tax rate tables. I'll be back with more inflation adjusted tax changes for the 2017 tax year.

Here's a preview of what you can expect, with this post listed, too, to provide a full index of the 2017 inflation and taxes series:

  1. 2017 tax rates and income brackets
  2. Standard deduction amounts, personal exemptions and limitations on itemized deductions and exemptions
  3. Retirement, pension plan contribution limits
  4. Credits and deductions, including adoption costs and assistance, Lifetime Learning Credit, Earned Income Tax Credit, educators' expenses, interest on education loans and transportation fringe benefits
  5. Medical related tax provisions, including contributions to a flexible spending account, health savings account, eligible long-term care premiums and the Affordable Care Act minimal essential coverage penalty
  6. Estate and gift tax limits, kiddie tax
  7. Alternative Minimum Tax exemption amounts and 2017 Social Security wage base
  8. International worker tax issues (foreign income, housing exclusions)
  9. Penalties, including failure to file a return, failure to file certain information returns and tax preparer penalties
  10. Standard mileage deduction amounts (issued separately, and later, by the IRS)

As I get these additional inflation related items posted, I'll put the links in above so this post will serve as an index and directory for the 2017 amounts.

Comments

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Lisa

I am trying to find what tax rate I should use to deduct taxes from a GoFundMe account, set up by my daughter, paid to me, for my husband who is going through chemo. We have insurance, which has helped with a lot of the cost, but his being on short-term disability, and not being able to work, has cut our income down $443.28 a week (that's what we receive - don't know exactly what the gross is, as they hold out insurance premiums and a few other things) from the short-term disability insurance (443.28 x 4 = $1773.12 per month - him), and I am also disabled, receiving $443.00 per MONTH (gross is higher - pay for medical insurance on me from it). The bills we have (truck payment, phones, house and auto insurance, electric, propane, internet, property taxes - seems like I'm missing a couple here) total almost $ 1700.00 per month, not including groceries, gas, co-pays for Dr visits, medical expenses we have to pay out of pocket, virtually no savings - right now I have $1000.00 in savings to cover the property taxes which are about $989.00 give or take, so that's going to be gone soon. My son (23) and my brother (53) are living with us, because they are having issues and are not employed. While they do some things around here to help us out, like mow the property, and such, they do not bring in money to help support any of us most of the time. So far, I've received around $250.00 from GoFundMe page, and I want to know what tax rate I should use to avoid having a big tax bill in the future. Still paying out medical bills for both myself and husband. HELP!

Kay Bell

Oops! My bad. Perils of cut and pasting the old table and then updating it; or in this case, overlooking a figure. Thanks, Adrienne, for pointing out my error. Now corrected!

Adrienne

I only looked at the single 2017 bracket (because that's what I am), but the top of the 15% bracket needs to be changed from $37,650 to $37,950, I think.

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