The income tax brackets for 2017 are a bit wider than for 2016 because of mild inflation during the 12-month period from Sept. 2015 through Aug. 2016, used to figure the adjustments. Tax rates do not change.
The 2017 standard deductions go up a bit. Married couples get $12,700, plus $1,250 for each spouse age 65 or older. Singles can claim $6,350 – $7,900 if 65 or up. Household heads get $9,350, plus $1,550 once they reach age 65. Blind people receive $1,250 more ($1,550 if unmarried and not a surviving spouse).
High-incomers lose itemized deductions starting at a higher level in 2017. Their write-offs have been slashed by 3% of the excess of AGI over $261,500 for singles, $287,650 for household heads and $313,800 for marrieds. But note: the total reduction can’t exceed 80% of itemizations. Medicals, investment interest, casualty losses and gambling losses (to the extent of winnings) are exempted from this cutback.
Personal exemptions stay at $4,050 for filers and their dependents in 2017. However, this tax break is phased out for upper-incomers. It is trimmed by 2% for each $2,500 of AGI over the same thresholds as for the itemized deduction phaseout.
The 20% top rate on dividends and long-term gains starts at a higher amount for 2017: Singles with taxable income above $418,400, household heads over $444,550 and joint filers above $470,700. The 3.8% Medicare surtax boosts the rate to 23.8%. The regular 15% maximum rate applies for filers with incomes below these amounts, except that filers in the 10% or 15% income tax bracket still get the special 0% rate.