Key Tax Numbers for 2017

2017 Social Security Wage Base, Self-employment Rate, Social Security and Medicare Rates

  • 2017 Social Security wage base is $127,200
  • Self-employed:
    • 2017 self-employment tax rate is 15.3%, which equals the Social Security rate of 12.4% plus the Medicare tax rate of 2.9%.
    • The 15.3% rate applies to earnings of up to $127,200 after the earnings are reduced by 7.65%. Schedule SE is used to figure Self-employment tax.
    • The 2.9% Medicare rate applies to gross earnings from the first dollar because, unlike the Social Security tax, which is limited to the $127,200 wage base, there is no earnings limit for the Medicare tax.
    • One half of the self-employment tax may be deducted on the first page of Form 1040 as an above-the-line deduction. This means, you don't have to itemize your deductions to claim this deduction.
  • Employees:
    • 2017 Social Security rate for employees is 6.2% and 6.2% for employers, for a total rate of 12.4%.
    • The maximum amount of social security tax withholding for an employee should not exceed $7,886.40.
    • The maximum amount of Social Security tax an employer contributes on behalf of each employee should not exceed $7,886.40.
    • 2017 Medicare tax rate for employees is 1.45% and 1.45% for employers, for a total rate of 2.9%.
    • Medicare tax is withheld from all gross wages, regardless of amount.

2017 Personal Exemption (for yourself and each dependent)

2017: Each Allowable Exemption is $4,050 (same as 2016)

Phaseout of Exemption Starts / Ends:

  • Joint return/Qualifying widow(er): $313,800 / $436,300
  • Head of Household: $287,650 / $410,150
  • Single: $261,500 / $384,000
  • Married filing separately: $156,900 / $218,150

2017 Standard Deduction

  • Married filing Joint return: $12,700
  • Qualifying widow(er): $12,700
  • Head of household: $9,350
  • Single: $6,350
  • Married filing separately: $6,350
  • Dependents - minimum deduction: $1,050
  • Additional Deduction if Age 65 or Older, or Blind - 2017 (born before January 2, 1953): Note: If you turned 65 on January 1, you are considered to be 65 as of December 31 for purposes of this deduction.
    • Married-per-spouse, filing jointly or separately:
      • $1,250 ($2,500 for age and blindness)
    • Qualifying widow(er):
      • $1,250 ($2,500 for age and blindness)
    • Single or head of household:
      • $1,550 ($3,100 for age and blindness)

2017 Capital Gain Rates for Assets Held Over One Year

Capital Gain Rates 2017
If your top bracket is... Your Maximum Rate is-
10% or 15% 0%
OVER 15% but below 39.6% 15%
39.6% 20%
Collectibles gain - maximum rate 28%
Unrecaptured Section 1250 gain on depreciated real estate - maximum rate

NOTE: Unrecaptured Section 1250 gain is figured on the "Unrecaptured Section 1250 Gain Worksheet" in Schedule D instructions. A net loss, if any, from the 28% group reduces unrecaptured Section 1250 gain. The effect of the computation on the Schedule D Tax Worksheet is to tax unrecaptured Section 1250 gain at either a 25% rate or at the regular rates on ordinary income, whichever results in a lower tax.
25%

2017 Qualified Dividends Tax Rate

2017 Qualified Dividend Rates
If Your Top Bracket Is... Your Qualified Dividends Rate is-
10% or 15% 0%
OVER 15% but below 39.6% 15%
39.6% 20%

2017 IRS Mileage Rates

  • Business: 53.5 cents per mile
  • Medical and Moving: 17 cents per mile
  • Charitable volunteers: 14 cents per mile

2017 Exclusion for Employer Provided Transportation

  • Free parking, transit passes, and van pooling: $255 per month (same as 2016)
  • Qualified bicycle commuting: $20 per month (same as 2016)

2017 IRA Contributions

Traditional IRAs:

  • Traditional IRA contribution limit: $5,500
  • Additional contribution if age 50 or older but under 70 1/2: $1,000
  • Deduction phaseout for active plan participant:
    • Single or head of household: $62,000 - $72,000
    • Married filing jointly, two participants: $99,000 - $119,000
    • Married filing jointly, one participant:
      • Participant spouse: $99,000 - $119,000
      • Non-participant spouse: $186,000 - $196,000
      • Married filing separately, live together, either participates:
        • $0 - $10,000
    • Married filing separately, live apart all year:
      • Participant spouse: $62,000 - $72,000
      • Non-participant spouse: no phaseout

Roth IRAs:

  • Roth IRA contribution limit: $5,500
  • Additional contribution if age 50: $1,000
  • Contribution limit phaseout range:
    • Single, head of household: $118,000 - $133,000
    • Married filing separately, live apart all year: $118,000 - $133,000
    • Married filing jointly, or qualifying widow(er): $186,000 - $196,000
    • Married filing separately, live together at any time: $0 - $10,000

2017 Elective Deferral Limits

  • 401(k), 403(b), 457 plans: $18,000
  • Salary-reduction SEP: $18,000
  • SIMPLE IRA: $12,500
  • Additional contribution if age 50 or older (catch-up contributions):
    • 401(k), 403(b), governmental 457 and SEP plans: $6,000
    • SIMPLE IRA: $3,000

2017 Education

  • American Opportunity credit limit-per student: $2,500
  • Lifetime Learning credit limit-per-taxpayer: $2,000
  • Phaseout of American Opportunity credit:
    • Married filing jointly: $160,000 - $180,000
    • Single, head of household, or qualifying widow(er): $80,000 - $90,000
  • Phaseout of Lifetime Learning credit:
    • Married filing jointly: $112,000 - $132,000
    • Single, head of household, or qualifying widow(er): $56,000 - $66,000
  • Student loan interest deduction limit: $2,500
    • Phaseout of deduction limit:
      • Married filing jointly: $135,000 - $165,000
      • Single, head of household, qualifying widow(er): $65,000-$80,000
  • Coverdell ESA limit: $2,000
    • Phaseout of limit:
      • Married filing jointly: $190,000 - $220,000
      • All others: $95,000 - $110,000
  • Tuition and fees deduction:
    • Tuition and fees deduction-tier 1 limit: $4,000
    • Income cut-off:
      • Married filing jointly: $130,000
      • Single, head of household, or qualifying widow(er) $65,000
    • Tuition and fees deduction limit-tier 2 limit: $2,000
    • Income cut-off:
      • Married filing jointly: $160,000
      • Single, head of household, or qualifying widow(er): $80,000

2017 Long-term Care Premiums

  • Limit on premium allowed as medical expense
    • Age 40 or under: $410
    • Over 40 but not over 50: $770
    • Over 50 but not over 60: $1,530
    • Over 60 but not over 70: $4,090
    • Over 70: $5,110

2017 First-year expensing (Section 179) and Bonus Depreciation

For qualifying property placed in service in 2017, first-year expensing is allowed up to a limit of $510,000. The limit begins to phase out if the total cost of qualifying property exceeds $2,030,000.

Section 179 Deduction Phase-out:

If the cost of qualifying property placed in service in 2017 is more than $2,030,000, you reduce the $510,000 expensing limit dollar-for-dollar for each dollar the cost of qualifying property exceeds $2,030,000 (but not below zero).

For example, if you place machinery in service during 2017 costing $2,100,000, the $510,000 deduction limit is reduced by $70,000 to $440,000.

If the cost of the property was $2,540,000 or more, you could not take the Section 179 deduction because the $510,000 deduction limit would be completely phased out.

2017 Bonus Depreciation:

The bonus depreciation rate for 2017 is 50%. Bonus depreciation is also called a Section 168(k) allowance and a special depreciation allowance.

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