2017 federal inflation adjustments released

Your Guide to State, Local, Federal, Estate + International Taxation

federal inflation adjustments released for 2017If you are getting a head start on tax planning for the 2017 tax year, you may be interested to know that the 2017 federal inflation adjustments have been released:

Standard Deduction

  • Married Filing Jointly Taxpayers – $12,700 ($12,600 in 2016)
  • Married Filing Separately & Single Taxpayers – $6,350 ($6,300 in 2016)
  • Head of Household – $9,350 ($9,300 in 2016)

Earned Income Credit

  • Maximum for 2017 is $6,318 ($6,269 in 2016)

Lifetime Learning Credit

  • The adjusted gross income amount used by joint filers to determine the reduction in the credit is $112,000 ($111,000 in 2016)

Foreign Earned Income Exclusion

  • $102,100 in 2017 ($101,300 in 2016)

Lifetime Exclusion for Estates

  • $5,490,000 in 2017 ($5,450,000 in 2016)

Adoption Credit

  • $13,570 in 2017

Health Coverage

  • Penalty for not maintaining minimum essential health coverage is $695

Limitations on Itemized Deductions

  • Married Filing Jointly – $313,800
  • Married Filing Separately – $156,900
  • Head of Household – $287,650
  • Single – $261,500

Interest on Education Loans

  • $2,500 is the maximum deduction

Alternative Minimum Tax Exemption

  • $54,300 and begins to phase out at $120,700 ($84,500 for married filing jointly for whom the exemption phases out at $160,900)

Some items have remained the same

  • Kiddie Tax – The child’s net unearned income remains at $1,050 for the purposes of determining whether a child’s unearned income is taxed at the parent’s tax rate
  • Personal Exemption – $4,050
  • Annual Gift Tax Exclusion – $14,000

Kelsey Olsen