Major Tax Changes for 2017

Man-signing-financial-paperwork

Will the changes have any effect on your tax return?

Retirement/Pensions Plans

 

IRA: For year 2017, a qualified individual who would be at least 50 years old by the end of the tax year is allowed to make an additional “catch-up” contribution to a conventional or Roth IRA in the amount of $1,000. If a qualified individual will become 50 years old before the end of a calendar year, the individual’s age will be considered to be 50 as of January 1 of that tax year. For 2017, you could still be able to take a full IRA deduction if you were covered by a retirement plan and your 2017 modified AGI is less than $99,000 (married filing jointly or qualifying widow(er)), and $62,000 (single or head of household). A partial IRA deduction is allowed until your MAGI reaches $119,000 if married filing jointly, up to $71,999 if single or head of household, or up to $9,999 if married filing separately.

SIMPLE IRA: This type of plan may only be established by an employer that has 100 or fewer employees whereby each employee receives at least $5,000 in compensation in the preceding year. These are usually employer sponsored plans which may permit employee contributions. For 2017, an employee who will be at least 50 years old by the end of the tax year is able to make an additional “catch-up” contribution to a SIMPLE retirement plan in the amount of $3,000.

Elective Deferral 401(k): These are generally employer sponsored plans which may permit employee contributions. For 2017, an employee who will be at least age 50 by the end of the tax year is able to take an additional “catch-up” contribution to an elective deferral 401(k) retirement plan in the amount of $6,000.

Plan 2017 2016 2015
IRA Maximum Contribution Limit * $5,500 $5,500 $5,500
SIMPLE IRA Maximum Contribution * Limit $12,500 $12,500 $12,000
401(k) Maximum Contribution Limit* (elective deferral) $18,000 $18,000 $18,000

* Individuals who are 50 or older by the end of the year may make catch-up contributions as explained above. Other limits may apply.

 

Income Levels At Which Individuals Must File Tax Returns

 

Income Levels at Which Individuals Must File Tax Returns
The table below lists the income levels at which individuals have to file income tax returns (even though no tax is owed).

Filing Status 2017 2016 2015
Single < 65 $10,400 $10,350 $10,300
Single 65 or older $11,950 $11,900 $11,850
Married, filing separately $4,050 $4,050 $4,000
Married, filing jointly, both spouses < 65 $20,800 $20,700 $20,600
Married, filing jointly, one spouse 65 or older $22,950 $21,950 $21,850
Married, filing jointly, both spouses 65 or older $23,300 $23,200 $23,100
Head of Household < 65 $13,400 $13,350 $13,250
Head of Household, 65 or older $14,800 $14,800 $14,800
Qualifying Widow(er) < 65 with dep. child $16,750 $16,650 $16,600
Qualifying Widow(er) 65 or older with dep. child $17,850 $17,850 $17,850

The income-level test is applicable to gross income and not to adjusted gross income.

 

Mileage Rate for Use of Your Car

 

Business:
Under the standard mileage method, the taxpayer determines the amount of the allowable deduction by multiplying all of the business miles driven during the year by the standard mileage rate. The standard mileage rate method may be utilized by self-employed individuals or employees who own or lease a car and operate up to four cars at a time for commercial purposes.

Purpose 2017 2016 2015
Business 53.5 cents/mi. 54 cents/mi. 57.5 cents/mi.
Charitable 14 cents/mi. 14 cents/mi. 14 cents/mi.
Medical 17 cents/mi. 19 cents/mi. 23 cents/mi.
Moving 17 cents/mi. 19 cents/mi. 23 cents/mi.

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