Articles

Key Retirement and Tax Numbers for 2017

Key Retirement and Tax Numbers for 2017

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans, thresholds for deductions and credits, and standard deduction and personal exemption amounts. Here are a few of the key adjustments for 2017.

Retirement plans

  • Employees who participate in 401(k), 403(b), and most 457 plans can defer up to $18,000 in compensation in 2017 (the same as in 2016); employees age 50 and older can defer up to an additional $6,000 in 2017 (the same as in 2016).
  • Employees participating in a SIMPLE retirement plan can defer up to $12,500 in 2017 (the same as in 2016), and employees age 50 and older will be able to defer up to an additional $3,000 in 2017 (the same as in 2016).

IRAs

The limit on annual contributions to an IRA remains unchanged at $5,500 in 2017, with individuals age 50 and older able to contribute an additional $1,000. For individuals who are covered by a workplace retirement plan, the deduction for contributions to a traditional IRA is phased out for the following modified adjusted gross income (AGI) ranges:

 

2016

2017

Single/head of household (HOH)

$61,000 - $71,000

$62,000 - $72,000

Married filing jointly (MFJ)

$98,000 - $118,000

$99,000 - $119,000

Married filing separately (MFS)

$0 - $10,000

$0 - $10,000

The 2017 phaseout range is $186,000 - $196,000 (up from $184,000 - $194,000 in 2016) when the individual making the IRA contribution is not covered by a workplace retirement plan but is filing jointly with a spouse who is covered.

The modified AGI phaseout ranges for individuals making contributions to a Roth IRA are:

 

2016

2017

Single/HOH

$117,000 - $132,000

$118,000 - $133,000

MFJ

$184,000 - $194,000

$186,000 - $196,000

MFS

$0 - $10,000

$0 - $10,000

Estate and gift tax

  • The annual gift tax exclusion remains at $14,000.
  • The gift and estate tax basic exclusion amount for 2017 is $5,490,000, up from $5,450,000 in 2016.

Personal exemption

The personal exemption amount remains at $4,050. For 2017, personal exemptions begin to phase out once AGI exceeds $261,500 (single), $287,650 (HOH), $313,800 (MFJ), or $156,900 (MFS).

These same AGI thresholds apply in determining if itemized deductions may be limited. The corresponding 2016 threshold amounts were $259,400 (single), $285,350 (HOH), $311,300 (MFJ), and $155,650 (MFS).

Standard deduction

These amounts have been adjusted as follows:

 

2016

2017

Single

$6,300

$6,350

HOH

$9,300

$9,350

MFJ

$12,600

$12,700

MFS

$6,300

$6,350

The 2016 and 2017 additional standard deduction amount (age 65 or older, or blind) is $1,550 for single/HOH or $1,250 for all other filing statuses. Special rules apply if you can be claimed as a dependent by another taxpayer.

Alternative minimum tax (AMT)

AMT amounts have been adjusted as follows:

 

2016

2017

Maximum AMT exemption amount

Single/HOH

$53,900

$54,300

MFJ

$83,800

$84,500

MFS

$41,900

$42,250

Exemption phaseout threshold

Single/HOH

$119,700

$120,700

MFJ

$159,700

$160,900

MFS

$79,850

$80,450

26% on AMTI* up to this amount, 28% on AMTI above this amount

MFS

$93,150

$93,900

All others

$186,300

$187,800

*Alternative minimum taxable income

 Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016

All information herein has been prepared solely for informational purposes only and opinions are subject to change. Past performance is not indicative of future results and all investments involve the risk of loss of principle. For information on how these general principles apply to your situation, consult an investment professional.

Article Topic Expert: Bryan Schumacher

Bryan is a Wealth Manager with SVA Plumb Wealth Management, LLC.

Bryan provides comprehensive financial planning to his clients as well as asset management, investment analysis and social security planning. He conducts educational meetings for plan participants in qualified retirement plans.

Contact Us

Want to learn more about this topic or the services SVA Plumb Financial provides? Great, we'd be happy to answer any of your questions. Just fill out the form below and we'll get in contact.