1. YOU are REQUIRED TO FILE an income tax return if your 2016 gross income reaches:
A. Single $10,300 (11,850 age 65 or older)
B. Married filing jointly $20,300 (21,850 age 65 or older, one spouse) (23,000 both spouses)
C. Married filing separately $4,000 (any age)
D. Head of household $13,250 (14,800 age 65 or older)
E. Qualifying widow (er) $16,600 (17,850 age 65 or older)
Elderly and blind taxpayers add $1,250 to $1,550.
2. PERSONAL EXEMPTIONS: $ 4,050 (same in 2016). Phase-outs for personal itemized deduction and personal exemption begins at: single $261,500, head of househo$287,650, married filing joint and surviving spouse $313,800, and married filing separate $156,900.
3. STANDARD DEDUCTIONS: If your combined itemized deductions for interests, taxes, medical and contributions are less than the following amounts, use the following standard deductions:
A. Single $6,300 (6,350 for 2017)
B. Married filing jointly $12,600 (12,700 for 2017)
C. Married filing separately $6,300 (6,350 for 2017)
D. Head of household $ 9,300 (9,350 for 2017)
Elderly and blind taxpayers get an extra $1,250 for married and $1,550 for unmarried.
4. CHILD TAX CREDIT: maximum credit amount is $1,000 per child (consists of refundable and non-refundable components).
5. EDUCATION CREDITS:
A. American Opportunity Credit (HOPE): maximum annual credit is $2,500 per eligible student was made permanent and 40% refundable.
B. Lifetime Learning Credit: maximum annual credit is $2,000 per return and is not refundable.
6. RETIREMENT PLANS LIMITS:
A. IRA contribution limits $5,500 ($6,500 age 50 or older).
B. SIMPLE IRA elective deferral limits 12,500 ($15,500 age 50 or over).
C. 401(k), 403(b), 457 elective deferral limits $18,000 ($24,000 age 50 or older).
D. Profit-sharing plan/SEP contribution limits 53,000 ($54,000 in 2017).
7.STANDARD MILEAGE RATES:
A. Business: 54.05¢ per mile.
B. Medical and Moving: 19¢ per mile.
C. Charity: 14¢ per mile.
8. LONG-TERM CARE INSURANCE DEDUCTION LIMITS: $390 to $4,870 depending on age. ($410 to $5,110 for 2017)
9. ALTERNATIVE MINIMUM TAX (AMT) EXEMPTION AMOUNT INCREASED. The AMT exemption amount is increased to $53,900 ($83,800 if married filing jointly and $41,900 if married filing separately).
10. FOREIGN EARNED INCOME EXCLUSION: $101,300.
11. SOCIAL SECURITY TAXES FOR NEXT YEAR 2017:
A. Minimum earnings to be covered by SS increases to $5,200 from $5,040 ($1,300 per quarter).
B. Maximum earnings allowed for 65 increases to $16,920 from $15,720.
C. Maximum amount subject to FICA increases to $127,200 from $118,500.
D. Early retirement age is 62, full retirement 66 (born 1960 & later).
12. ESTATE AND GIFT TAXES FOR
A. Estate/gift tax Exclusion:
2016 – $5,540,000 2017 – $5,490,000
B. Annual gift tax exclusion:
2016 – $14,000 2017 – $14,000
In accordance with IRS Circular 230, this communication is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purpose.
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Al-os & Associates Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies.
