A Thomson Reuters special report, Projected 2017 Inflation-Adjusted Tax Brackets and Other Key Figures, demonstrates that, despite modest inflation in the past year, tax brackets will be adjusted upward in 2017, easing the tax burden slightly for many taxpayers. The adjustments prevent the loss of tax benefits due solely to inflation.
The report provides a detailed projection of inflation-adjusted income tax brackets, standard deduction and exemption amounts, and many other tax items for 2017 to equip professionals, their clients, and compliance software developers with the information needed for tax planning and preparation.
The report, which is based on calculations derived from the most recent Consumer Price Index data published by the Bureau of Labor Statistics, released on September 16, 2016, includes projections for income tax rate schedules for single filers, married filing jointly, married filing separately, head of household and surviving spouses, taxable income brackets for estates and trusts, and standard deductions.
Catherine Murray, senior tax analyst with Thomson Reuters Tax & Accounting business, said:
Although modest, these increases may provide some much-needed relief to taxpayers, especially those at the lower end of the income spectrum. With these projections of key tax figures for 2017, tax strategizing can now begin in earnest with a clearer picture of the 2017 tax profile.”
According to the report, the minimum gross income thresholds for filing in 2017 have increased a bit. They are based on the basic standard deduction, which increases for heads of household, the additional deduction, and the exemption amounts, which will increase to $4,050. Also notable is the starting point for the phasing out of taxpayers’ personal exemptions, ranging from $313,800 for spouses filing jointly/surviving spouses and $287,650 for heads of household to $261,500 for single taxpayers.
The same higher dollar thresholds will apply to the phaseout of itemized deductions. That’s compared to this year, when phaseouts began at $311,300 of adjusted gross income for joint filers, $285,350 for heads of household, and $259,400 for singles. The higher phaseout levels prevent inflation from eating into the value of these deductions.