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2017 Tax RateExemption Amounts and Standard Deductions announced
IRS has announced annual inflation adjustment for various 2017 provisions, incorporating tax tables, tax rate schedules etc. for tax items.
The adjustments of annual inflation for several provisions for 2017 have been announced by the Internal Revenue Service (IRS). This includes cost-of living adjustments, tax tables and tax rate schedules for specific tax items.
These numbers are applicable for the tax year 2017 and got in effect from January 1, 2017. Hold on! They AREN’T the tax rates and numbers that you’ll have to use to put your previous year’s income tax returns in order in 2017. To a certain extent, these tax rates and numbers are the ones that you’ll use to make your 2017 tax returns in 2018.
Are you expecting any hefty changes? If not, then you can make use of the updated and restructured tax tables to assess your liabilities for the tax year 2017. If in any case, you expect to create more wealth, get married, purchase a new house, have kids or any other life changes; you’ll wish to chew over adjusting your preservation or nipping your sketchy tax payments.
Tax Brackets:
Let’s bring the cat out of the bag and go through the tax rates and tax brackets for 2017:
Individual Taxpayers
| If the Taxable Income is between: The Tax Due is: |
| 0-$9,325 10% of taxable income $9,326-$37,950 $932.50+15% of the amount over $9,325 $37,951-$91,900 $5,226.25+ 25% of the amount over $37,950 $91,901-$191,650 $18,713.75+28% of the amount over $91,900 $191,651-$416,700 $46,643.75+33% of the amount over $1941,650 $416,701-$418,400 $120,910.25+35% of the amount over $416,700 $418,401+ $121,505.25+39.6% of the amount over $418,400 |
Married Taxpayers Filing Tax Returns Jointly & Surviving Spouses
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| If the Taxable Income is Between: The Tax Due is: |
| 0-$18,650 15% of the taxable income $18,651-$75,900 $1,865+15% of the amount over $18,650 $75,901-$153,100 $10,452.50+25% of the amount over $75,900 $153,101-$233,350 $29,752.50+28% of the amount over $153,100 $233,351-$416,700 $52,222.50+33% of the amount over $233,351 $416,701-$470,700 $112,728+35% of the amount over $416,700 $470,701+ $131,628+39.6% of the amount over $470,700 |
Heads of Household
| If the Taxable Income is Between: The Tax Due is: |
| 0-$13,350 10% of the taxable income $13,351-$50,800 $1,335+15% of the amount over $13,350 $50,801-$131,200 $6,952.50+25% of the amount over $50,800 $131,201-$212,500 $27,052.50+28% of the amount over $131,200 $212,501-$416,700 $49,816.50+33% of the amount over $212,500 $416,701-$444,650 $117,202.50+35% of the amount over $416,700 $444,551 $126,950+39.6% of the amount over $444,550 |
Married Filing Separately
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| If the Taxable Income is Between: The Tax Due is: |
| 0-$9,325 10% of the taxable income $9,326-$37,950 $932.50+15% of the amount over $9,325 $37,951-$76,550 $5,226.25+25% of the amount over $37,950 $76,551-$116,675 $14,876.25+28% of the amount over $76,550 $116,676-$208,350 $26,111.25+33% of the amount over $116,675 $208,351-$235,350 $56,364+35% of the amount over $208,350 $235,351+ $65,814+39.6% of the amount over $235,350 |
The standard deduction for married couples’ efiling income tax separately and single tax payers’ has gone up to $6,350 in the year 2017 from $6,300 in 2016. However, for wedded couples filing income tax jointly, the standard deduction has been set up to $12,700 from $12,600 from the previous year. Also, the standard exemptions for the heads of the households have been set up to $9,350 for the current year from $9,300 from the preceding year. The numbers will look like this:
| Filing Status Standard Deduction Amount |
| Individual Taxpayer $6,350 Married Taxpayers Filing Jointly and Surviving Spouse $12,700 Married Taxpayers Filing Separately $6,350 Head of Household $9,350 |
The sum of additional standard deduction is $1,250 for the blind and the aged for 2017. The additional standard deduction amount has been raised to $1,550 if the person is also single and not an existing spouse.
The standard deduction of a national (who pays taxes) who can be claimed as a beneficiary or dependent by the other taxpayer cannot go beyond the maximum of $1,050 or $350 along with the earned income of the dependent.
For the taxpayers who enumerate their deductions, the Pease restraints, titled after ex-Rep. Don Pease (D-OH) may put a ceiling on certain deductions for the taxpayers who have a higher income. The Pease limits for 2017 are:
Pease Limitations
| Filing Status Pease Threshold Starts |
| Individual Taxpayers $261,500 Married Taxpayers Filing Jointly and Surviving Spouse $313,800 Married Taxpayers Filing Separately $287,650 Head of Household $156,900 |
If there is the application of Pease limitations, the sum of all your enumerated deductions is trimmed down by the lesser of:
3 percent of the AGI above the pertinent limitation; or
80 percent of the sum of enumerated deductions otherwise permissible for the tax year
Pease thresholds are applied to the home credit interest deduction, miscellaneous enumerated deductions, charitable donations, and local and state tax deductions. They are not applicable to investment expenses, certain theft or casualty loss, medical expenses, and gambling losses.
Bear in mind that the floor for your medical expenses in 2017 is 10 percent of the AGI, i.e. adjusted gross income for all the taxpayers. The taxpayers who have attained an age more than 65 years make use of 7.5 percent of the floor via 2016: in the year 2017, the favoured tax rate was disappeared and all the taxpayers are caused to undergo to the 10 percent floor.
The amount of personal exemption is $4,050 for 2017, the same as that in 2016. However, the deduction is causing to undergo a phase-out, which starts with the adjusted gross incomes of $261,500 and $313,800 for married couples who file jointly. It eliminates completely at $ 384,000 and $436,300 for married couples who file jointly. Elimination applies as under:
Personal Exemption Phase-out “PEP” Thresholds
| Filing Status | PEP Threshold Starts | PEP Threshold Ends |
| Individual | $261,500 | $384,000 |
| Married Taxpayers Filing Jointly | $313,800 | $436,300 |
| Head of Household | $287,650 | $410,150 |
| Married Taxpayers Filing Separately | $156,900 | $218,150 |
In the past years, the AMT was caused to undergo a last-minute mess up by the Congress to ‘patch’ the deduction. However, the amounts of AMT deductions are enduringly adjusted for inflation, is a part of the ATRA, i.e. the American Taxpayer Relief Act 2012. That’s the reason you see it on this list now. The AMT deductions are as under:
Alternative Minimum Tax (AMT) Deductions
| Filing Status Deduction Amount |
| Individual Taxpayers $54,300 Married Taxpayers Filing Jointly & Surviving Spouses $84,500 Married Taxpayers Filing Separately $42,250 Trusts and Estates $24,100 |
The kiddie tax is applied to the unearned income for kids under 19 and the college students under 24 years of age. For the year 2017, the upper limit for the kiddie tax, i.e. the unearned net income amount taken home by a child without making payment of any federal income tax is $1,050. All the unearned income over and above $2,100 is taxed at the tax rate of the parents.