A new year brings more tax changes
Unlike recent years, 2017 does not bring a multitude of changes in the tax law.
Most of the last-minute changes signed into law late in 2015 applied to 2017 as well as 2016.
Every year, however, certain important thresholds, limits, exclusions and brackets always change. These differences are not earth shattering, but they will have a bearing on your personal taxes in 2017.
Here are a few of the changes:
Standard mileage: The rate falls to 53.5 cents per mile driven, down from 54 cents per mile.
Section 179 expensing: The maximum amount allowed climbs to $510,000, up from $500,000 in 2016. This amount phases out dollar for dollar after more than $2,030,000 of assets are placed in service during 2017.
R&D credit: For 2016 returns, qualifying small businesses may be elect to apply a portion of its R&D credit against payroll taxes instead of regular income taxes.
Work Opportunity Tax Credit: For 2016 returns, certain businesses that hire “long-term unemployed” individuals may receive an expanded Work Opportunity Tax Credit. Employers that hire workers who have received unemployment benefits and have been out of work for 27 weeks or more may qualify
Health savings accounts: The maximum allowed contribution rises to $3,400 for singles and stays at $6,750 for families.
Lifetime exclusion for gift and estate tax: This increases to $5,490,000 in 2017. However, the annual gift tax exclusion remains the same at $14,000.
Social Security wage base: This increases to $127,200, which is up from the 2016 wage base of $118,500.
In addition to the highlights mentioned above, there are plenty of additional changes to other common limits and thresholds. For example, each year the income levels that make up the tax brackets are indexed for inflation. In addition, the annual per-diem rates are adjusted. Rather than summarize all of these changes here, we've posted our 2017 Pocket Tax Guide online.
The guide will help determine your 2017 tax bracket, phase-outs, limitations, tax rates, exemptions and deductions.