What is new in 1040 filing for 2017 ? Latest update in 1040 filing this year:
The Internal Revenue Service (IRS) has declared the yearly swelling changes for various arrangements for the year 2017, including charge rate plans, impose tables, and typical cost for basic items modifications for certain duty things.
These are the material numbers for the assessment year 2017 - at the end of the day, successful January 1, 2017. They are NOT the numbers and assessment rates that you'll use to set up your 2016 government forms in 2017 (you'll see them here). Or maybe, these numbers and duty rates are those you'll use to set up your 2017 expense forms in 2018.
On the off chance that you aren't expecting any noteworthy changes, you can utilize the refreshed duty tables to assess your risk for the 2017 expense year. Assuming, in any case, you are hoping to profit, get hitched, purchase a house, have an infant or other life change, you'll need to consider modifying your withholding or tweaking your assessed impose installments.
Tax Brackets: The big news is, of course, the tax brackets and tax rates for 2017:
The standard reasoning for single citizens and wedded couples documenting independently is $6,350 in 2017, up from $6,300 in 2016; for wedded couples recording together, the standard derivation is $12,700, up $100 from the earlier year; and for heads of family units, the standard conclusion is $9,350 for 2017, up from $9,300. The numbers resemble this:
Single : $ 6350.00
MFJ : $ 12700.00
MFS: $ 6350.00
HOH : $ 9350
For 2017, the additional standard deduction amount for the aged or the blind is $1,250. The additional standard deduction Amount is increased to $1,550 if the individual is also unmarried and not a surviving spouse.
For 2017, the standard deduction for a taxpayer who can be claimed as a dependent by another taxpayer cannot exceed the greater of (a) $1,050 or (b) $350 + the dependent's earned income.
The personal exemption amount for 2017 is $4,050, the same as 2016. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500
The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24. For 2017, the threshold for the kiddie tax - meaning the amount of unearned net income that a child can take home without paying any federal income tax - is $1,050. All unearned income in excess of $2,100 is taxed at the parent’s tax rate.
Some tax credits are also adjusted for 2017. Some of the most common tax credits are:
· Earned Income Tax Credit (EITC). For 2017, the maximum EITC amount available is $6,318 for taxpayers filing jointly who have 3 or more qualifying children. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds, and phase-outs.
· Child & Dependent Care Credit. For 2017, the value used to determine the amount of credit that may be refundable is $3,000 (the credit amount has not changed). Keep in mind that this is the value of the expenses used to determine the credit and not the actual amount of the credit.
· Adoption Credit. For 2017, the credit allowed for an adoption of a child with special needs is $13,570, and the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $13,570. Phaseouts do apply beginning at taxpayers with modified adjusted gross income (MAGI) in excess of $203,540 and completely phased out for taxpayers with MAGI of $243,540 or more.
· Hope Scholarship Credit. The Hope Scholarship Credit for 2017 will remain an amount equal to 100% of qualified tuition and related expenses not in excess of $2,000 plus 25% of those expenses in excess of $2,000 but not in excess of $4,000. That means that the maximum Hope Scholarship Credit allowable for 2017 is $2,500.
Lifetime Learning Credit. As with the Hope Scholarship Credit, income restrictions apply to the Lifetime Learning Credit. For 2017, the adjusted gross income amount used to determine the reduction in the Lifetime Learning Credit is $56,000 ($112,000 for joint filers).
Changes were also made to certain tax deductions, deferrals & exclusions for 2017. You'll find some of the most common here:
· Student Loan Interest Deduction. For 2017, the maximum amount that you can take as a deduction for interest paid on student loans remains at $2,500. Phaseouts apply for taxpayers with modified adjusted gross income (MAGI) in excess of $65,000 ($135,000 for joint returns) and is completely phased out for taxpayers with modified adjusted gross income (MAGI) of $80,000 or more ($165,000 or more for joint returns).
· Foreign Earned Income Exclusion. For tax year 2017, the foreign earned income exclusion is $102,100, up from $101,300 for tax year 2016.
· Transportation and Parking Benefits. For 2017, the monthly limitation for the qualified transportation fringe benefit is $255 for transportation in a commuter highway vehicle or any transit pass, as well as qualified parking.
· Medical Savings Accounts. For 2017, the term "high deductible health plan" means, for participants who have self-only coverage in a Medical Savings Account, an annual deductible that is not less than $2,250 but not more than $3,350. For self-only coverage, the maximum out of pocket expense amount is $4,500. For 2017, the term "high deductible health plan" means, for participants with family coverage, an annual deductible that is not less than $4,500 but not more than $6,700. For family coverage, the maximum out of pocket expense is $8,250.
Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 53.5 cents per mile for business miles driven, down from 54 cents for 2016
- 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
- 14 cents per mile driven in service of charitable organizations.
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