Because of continued low inflation, the Internal Revenue Service announced this week to make adjustments for many tax provisions in 2017.
According to IRS, over 50 tax provisions, including the tax schedules, will be involved in the inflation adjustments. For tax year 2017, the standard deduction (married filing jointly) increases to $12,700, which was $100 more from tax year 2016; the standard deduction (single taxpayers and married individuals filing separately) rose from $6,300 in 2016 to $6,350 in 2017; the standard deduction (heads of households) is up $50 to $9,350 for tax year 2017.
As for the top individual rate, the 39.6% top rate will apply to income over $418,400 for single taxpayers, increasing from $415,050 last year; for married taxpayers filing jointly, the top individual tax rate will affect married couples whose income are above $470,700, which was up from $466,950 for tax year 2016. In addition, the personal exemption remains the same with that in 2016, which was $4,050.
The estate and gift tax exemption increased to $5.49 million per individual from from $5.45 million in 2016. And for married couple, estate and gift tax exemption is $10.98 million. Annual gift exclusion will be the same at $14,000 for tax year 2017.
The inflation adjustments will apply to tax return for 2017, which will be filled in early 2018.