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Tax Tips for Individuals

2018
Jan-08-2018Tax Cuts and Jobs Act -- Individual Provisions
2017
Jan-14-20172017 Income Tax Updates
2016
Aug-19-2016Installment Agreement FeesMar-29-2016Where Is My Refund?Feb-10-2016How To Make Your Children "Pay Off" at Tax TimeFeb-05-2016IRS Payment OptionsFeb-01-2016Choosing the Right Filing StatusJan-22-2016Choosing the Right Tax Forms and Who Should File
2015
Sep-09-2015IRS Payments Made Easier (but not painless)Sep-09-2015IRS Reminder--Report Name ChangesSep-04-2015Affordable Care Act EstimatorsSep-04-2015College Tuition Tax CreditsSep-04-2015Tax Tips --DivorceJan-23-2015IRS Payment Plans / Fresh Start Program
2014
Dec-31-2014Affordable Care Act Tax provisions for 2014
Current
Oct-02-20135 Tips for Early PreparationOct-02-2013Amended ReturnsOct-02-2013Ayuda en EspanolOct-02-2013Car DonationsOct-02-2013Charitable ContributionsOct-02-2013Check Withholding to Avoid a Tax SurpriseOct-02-2013Credit for the Elderly or DisabledOct-02-2013Deductible TaxesOct-02-2013Deduction of State and Local TaxesOct-02-2013Earned Income Tax Credit for Certain WorkersOct-02-2013Filing an ExtensionOct-02-2013Filing Deadline and Payment OptionsOct-02-2013Foreign IncomeOct-02-2013Gift GivingOct-02-2013Marriage or Divorceā€¦Oct-02-2013Refinancing your HomeOct-02-2013Refund, Where's My Refund?Oct-02-2013Selling your HomeOct-02-2013Tax Credit For Plug-in Electric VehiclesOct-02-2013Tax Incentives for Higher EducationOct-02-2013Ten Ways to Avoid Problems at Tax TimeOct-02-2013The Tax Advocate Service, provided by the IRSOct-02-2013Tips and Taxes

2017 Income Tax Updates

Date: 1/14/2017

 2017 income Thresholds for credits and deductions:

 

The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24. For 2017, the threshold for the kiddie tax - meaning the amount of unearned net income that a child can take home without paying any federal income tax - is $1,050. All unearned income in excess of $2,100 is taxed at the parent’s tax rate.

Some tax credits are also adjusted for 2017. Some of the most common tax credits are:

  • Earned Income Tax Credit (EITC). For 2017, the maximum EITC amount available is $6,318 for taxpayers filing jointly who have 3 or more qualifying children. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds, and phase-outs.
  • Child & Dependent Care Credit. For 2017, the value used to determine the amount of credit that may be refundable is $3,000 (the credit amount has not changed). Keep in mind that this is the value of the expenses used to determine the credit and not the actual amount of the credit.
  • Adoption Credit. For 2017, the credit allowed for an adoption of a child with special needs is $13,570, and the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $13,570. Phaseouts do apply beginning at taxpayers with modified adjusted gross income (MAGI) in excess of $203,540 and completely phased out for taxpayers with MAGI of $243,540 or more.
  • Hope Scholarship Credit. The Hope Scholarship Credit for 2017 will remain an amount equal to 100% of qualified tuition and related expenses not in excess of $2,000 plus 25% of those expenses in excess of $2,000 but not in excess of $4,000. That means that the maximum Hope Scholarship Credit allowable for 2017 is $2,500.
  • Lifetime Learning Credit. As with the Hope Scholarship Credit, income restrictions apply to the Lifetime Learning Credit. For 2017, the adjusted gross income amount used to determine the reduction in the Lifetime Learning Credit is $56,000 ($112,000 for joint filers).

Changes were also made to certain tax deductions, deferrals & exclusions for 2017. You'll find some of the most common here:

  • Student Loan Interest Deduction. For 2017, the maximum amount that you can take as a deduction for interest paid on student loans remains at $2,500. Phaseouts apply for taxpayers with modified adjusted gross income (MAGI) in excess of $65,000 ($135,000 for joint returns) and is completely phased out for taxpayers with modified adjusted gross income (MAGI) of $80,000 or more ($165,000 or more for joint returns).
  • Foreign Earned Income Exclusion. For tax year 2017, the foreign earned income exclusion is $102,100, up from $101,300 for tax year 2016.
  • Transportation and Parking Benefits. For 2017, the monthly limitation for the qualified transportation fringe benefit is $255 for transportation in a commuter highway vehicle or any transit pass, as well as qualified parking.
  • Medical Savings Accounts. For 2017, the term "high deductible health plan" means, for participants who have self-only coverage in a Medical Savings Account, an annual deductible that is not less than $2,250 but not more than $3,350. For self-only coverage, the maximum out of pocket expense amount is $4,500. For 2017, the term "high deductible health plan" means, for participants with family coverage, an annual deductible that is not less than $4,500 but not more than $6,700. For family coverage, the maximum out of pocket expense is $8,250.