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Update: These 2017 tax brackets apply to 2017 tax returns filed in early 2018. For the 2018 tax brackets, click here.
The end of the year is upon us, and this means that you’re probably starting to think about the 2016 tax season. You know, the start of the new year, when we begin preparing our taxes from the calendar year (2016) that just ended.
Well, the IRS decided to throw you a curveball this week by releasing the 2017 tax rates, brackets, and deductions. This is great if you want to start planning for the next calendar year (as you should!). But it also has the potential to be confusing when you’re filling out your tax returns in a few short weeks.
Learn More About Tax Related Calculations
When looking at these numbers, please keep in mind that they cover tax year 2017. You will use these numbers throughout calendar year 2017, when doing things such as determining your withholdings. However, you will not use these numbers for filing taxes until the first quarter of 2018. When filing your 2016 taxes (which you’ll do sometime between January and April 2017), you should reference the 2016 Federal Income Tax page.
[2016 Income Tax Brackets FB] As happens almost every year, the numbers are adjusted to account for inflation. That means that they are slightly more taxpayer-friendly than they were for 2016. But at the same time, you won’t see any dramatic changes either. Inflation remains on the low end of the historic spectrum, so the adjustments in the tax numbers are barely perceptible.
2017 Personal Exemption and Phase-out
For 2017, the personal exemption will be the same as it was in 2016, which was $4,050 per person.
However, keep in mind that the personal exemption phases out for high income taxpayers. This phase-out is based on the following income levels:[Premier High Yield Savings]
Filing Status: AGI – Beginning of Phase-Out: AGI – Completed Phase-Out:
Married filing jointly and surviving spouses $313,800 $436,300
Heads of households $287,650 $410,150
Unmarried individuals, other than surviving spouses and heads of households $261,500 $384,000
Married individuals filing separately $155,650 $216,900
2017 Standard Deduction and Phase-out
For 2017, the personal exemption limits are as follows:
Married filing jointly and surviving spouses: $12,700
Heads of household: $9,350
Single, or married filing separately: $6,350
These numbers are up a bit from 2016, with a bump of $50-100 each.
Just as is the case with personal exemptions, the IRS also imposes a limit on itemized deductions based on your income, as follows:
Married filing jointly and surviving spouses: $313,800
Heads of household: $287,650
Married filing separately: $156,900
2017 Tax Rate Tables
Below are the tax rates for 2017. Remember, the income ranges do not apply to your gross income. Rather, they apply to your taxable income only. That’s your gross income from all sources, less retirement contributions, alimony, certain education expenses, personal exemptions, standard or itemized deductions, and various other deductions.