Key 2017 Tax Updates:
- Marginal tax rates will remain the same as last year with 39.6% being the highest marginal tax rate. Tax brackets ranges will increase in line with COLA, so people with no income increases will actually see a lower marginal tax rate.
- The standard deduction rises by $50 for heads of household, single and married filling separate filers. Married couples filing jointly’s standard deduction rises by $100 over 2016 levels.
- The personal exemption stayed flat and did not rise for any filing type group. The exemption can be claimed for all qualifying
- The Alternative Minimum Tax (AMT) exemption rose marginally in line with inflation. See more on AMT changes here.
- The maximum Earned Income Tax Credit thresholds will increased moderately relative to other tax credits given the number of low income people that depend on this. See the latest EIC tables,
- The gift tax exclusion will remain at $14,000
- Health Flexible spending arrangements (FSA) employee contribution limits will rise by $50 to $2,600 as mandated under the Affordable Care Act. The health FSA pre-tax deduction limit is per employee, per employer per plan year.
- 401K and IRA limits stayed generally flat in 2017
- Foreign earned income exclusion increased by $800 to $102,100.