Changes To Deductions, Brackets, and Exemptions That May Affect You This Coming Tax Season

Accounting consultationBeing one of Chicago’s top sources for tax advice is something that isn’t easy. With a new government in place, constantly shifting rates, and a number of other obstacles, our dedicated CPAs work hard to ensure that all of our information is as accurate and up-to-date as possible. Only by understanding and internalizing the subtle nuances of tax preparation are we able to provide our clients with the impeccable customer service that has allowed us to excel in the industry for many years. Taking this into consideration, we here at Accounting Solutions Ltd. have compiled a comprehensive list of the various deductions, brackets, and exemptions that apply in the 2017 season. The following numbers have been adjusted for inflation, and the points themselves have been chosen by our professional team as ones pertaining especially to citizens and small business owners within our beloved city.

  • For single people as well as married couples who decide to file separate returns, the standard deduction has made no real change, remaining at $6,350 (or $12,700 for married couples filing jointly).
  • Standard deductions for heads of household has increased from 2016’s $9,300 to $9,350.
  • While the personal exemption for 2017’s season remains at $4,050, there is now a new rule that phases it out starting around gross incomes of $261,500, eventually phasing out completely around $384,000.
  • The tax exclusion for someone presenting a gift to a spouse who is not a citizen of the United States is up from last year’s $148,000 to $149,000. The annual exclusion for gifts in general remains at $14,000.
  • The tax rate of 39.6 percent is one that will affect un married peoples with incomes of over $418,400, a jump from $415,050. This becomes $470,700 for married taxpayers filing a joint return, another increase from 2016’s $466,950.
  • The maximum for Earned Income Credit is now $6,318 for people who file jointly and also have at least 3 or more qualifying children.
  • Decedents who perish this year have an exclusion amount of $5,490,000, another increase from the previous year’s $5,450,000.
  • Exclusions relating to gifts has not changed, hovering around a steady $14,000 for 2017.
  • Annual limits on employees contributing towards employer-sponsored healthcare spending arrangements (FSA) is no $2,600.
  • The small business health care tax credit now states that maximum credit is phased out based off the number of full-time employees an employer has in an excess of 10. Employer’s annual wages in excess of $26,200 will also be applied, an increase from the $25,900 we saw in 2016.

With tax season rolling around, we can only do our best to articulate the importance that all of our clients have to us. You see, your tax business is our business too, and we dedicate ourselves towards providing those in need with the resources required to properly fulfill their monetary duties. If you would like more information, feel free to give us a call, or visit our website for more information regarding the services that we can provide.
**Disclaimer: These are the updates for 2017 currently. There are many tax laws and changes that will occur during this year that may change the information contained herein. Please consult with the tax practitioner of your choice prior to implementing any of these changes based upon this information.**