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Financial Resource Center

2017 Income Tax and Retirement Planning Information

There have been several major tax law changes over the past few years with staggered effective dates.  These laws have significantly changed the way you may want to consider your financial situation, especially retirement planning. Below is some information that you may find helpful as you consider your 2017 taxes, however be sure to consult a trusted tax advisor with any questions regarding your specific personal tax needs and opportunities.

Income Tax Rate Schedules for 2017

2017 Single Return Rate Schedule

Taxable income levels          Tax rate
$0 to $9,325                             10%
$9,326 to $37,950                    15%
$37,951 to $91,900                   25%
$91,901 to $191,650                 28%
$191,651 to $416,700               33%
$416,701 to $418,400               35%
Over $418,400                           39.6%

2017 Married Filing Jointly Rate Schedule

Taxable income levels           Tax rate
$0 to $18,650                            10%
$18,651 to $75,900                   15%
$75,901 to $153,100                  25%
$153,101 to $233,350                28%
$233,351 to $416,700                33%
$416,701 to $470,700                35%
Over $470,700                           39.6%

2017 Standard Deduction

  • Married couples filing a joint return - $12,700
  • Single return filers - $6,350

2017 Personal Exemption Amount - $4,050

2017 Taxation of Dividends and Long Term Capital Gains

For taxpayers in the 10% and 15% brackets, qualifying dividends and long term capital gains (assets held for more than a year) will be taxed at 0%.  For those in 25%, 28%, 33% and 35% tax brackets, the tax rate on dividends and long term capital gains is 15%.  For those in the top 39.6% bracket, the tax rate is 20%.

2017 Medicare Surtaxes

As part of the health care reform enacted in 2010, additional Medicare surtaxes begin in 2013 for high income wage earners and high income investors.  The surtaxes apply when a single taxpayer’s Modified Adjusted Gross Income (MAGI) exceeds a threshold of $200,000 or joint return filers when their MAGI exceed $250,000.

  • For wage earners, an additional 0.9% Medicare surtax applies to wages (including bonuses and self-employment income) above the threshold amounts.
  • For investors, an additional 3.8% Medicare surtax applies to net investment income (taxable interest, dividends, capital gains, etc.) in excess of the thresholds.

Estate Taxes

  • 2017 Estate size taxation starts at $5,490,000 with a top estate tax rate of 40%
  • 2018 estate size taxation indexed for inflation with top estate tax rate of 40%

Regular IRA and Roth IRA Contribution Limits

Tax year 2017 IRA contribution limit is $5,500; additional contribution limits for those 50 and over is $1,000.

401(k) Retirement Plan Contribution Limits

Tax year 2017 401(k) deferral limit is $18,000; additional contribution limits for those 50 and over is $6,000.

Education (or Coverdell) IRAs

For 2017, the annual contribution limit is $2000 with eligibility phase out beginning at $190,000 (for married filing jointly) and $95,000 of Adjusted Gross Income (some modifications apply).

Annual Gift Tax Exclusion

For 2017, gifts of $14,000 and under are not subject to gift tax.

2017 Payroll Taxes – Social Security and Medicare

  • 2017 Employee wages subject to Social Security tax of 6.2% - $127,200.
  • 2017 Employee wages subject to Medicare tax of 1.45% on all wages and an additional 0.9% on wages above $200,000 for taxpayers filing single returns.  For taxpayers filing joint returns, the additional 0.9% applies to wages above $250,000.
  • 2017 Self employment income subject to Social Security tax of 12.4% - $127,200.
  • 2017 Self employment income subject to Medicare tax of 2.9% on all self-employment income and an additional 0.9% on wages above $200,000 for taxpayers filing single returns.  For taxpayers filing joint returns, the additional 0.9% applies to wages above $250,000.

2017 Social Security Benefits

  • 2017 Average monthly benefit for all retired workers - $1,360.
  • 2017 Average monthly benefit for retired couples - $2,260.
  • 2017 Maximum monthly benefit for a worker at full retirement age - $2,687.

 

Taxes and Insurance