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Key Retirement and Tax Numbers for 2017 (Jan)

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

Note:  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).

Note:  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

Note: 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