The IRS has just announced annual inflation adjustments for 50 tax provisions and cost of living adjustments that affect dollar limitations for pension plans and other retirement-related items for the 2017 Tax Year.
Standard Deduction rises to $12,700 for married; $6,350 for single or married taxpayers filing separately; $9,350 for heads of householdsPersonal Exemption remains at $4,050.
Tax Rate of 39.6% for taxpayers with income exceeding $418,400 ($470,700 for married couples filing jointly). Other rates can be found in the rate Revenue Procedure details.
Alternative Minimum Tax Exemption is $54,300 and begins to phase out at $120,700 (at $160,900 of income for married couples filing jointly it is $84,500). The 28 percent tax rate applies to taxpayers with taxable incomes above $187,800 ($93,900 for married individual filing separately).
Earned Income Credit maximum is $6,318 for taxpayers filing jointly with 3 or more qualifying children.
Monthly Transportation (and parking) Fringe Benefit is $255.
Health Coverage Penalty for lack of coverage $695.
Estate Tax Exemptions have increased to $5,490,000.
Medical Savings Account Deductibles, Lifetime Learning Credit, Foreign Earned Income Exclusion have also had changes.
For complete details, see Revenue Procedure 2016-55.
Traditional IRA Contributions must meet certain conditions. Deductions may be reduced or phased-out depending on filing status and income.Roth IRA Contribution phase outs are also affected as are Saver’s Credits.
Contribution Limits to 401 (k), 403 (b), most 457 and the Federal Government’s Thrift Savings Plans remain unchanged at $18,000.
Catch up Contribution limits for employees aged 50+ remains unchanged at $6,000.
Contribution Limits to an IRA remain unchanged at $5,500.
Annual Benefits from Qualified Retirement Plans have increased to $215,000 per year.
Additional adjustments and changes for elective deferrals, key employee dollar limitations, participants in government plans, premiums paid to longevity annuity contracts and other retirement-related areas can be found in greater detail at Revenue Procedure 2016-62.