The IRS has released some inflation-adjusted figures for 2017.
The 2017 standard deduction will increase to $6,350 for single taxpayers. For married joint filers, the standard deduction will increase to $12,700. For heads of household, the standard deduction will increase to $9,350.
The additional standard deduction for the blind and aged will remain $1,250 for married taxpayers. For unmarried taxpayers, the amount of the additional standard deduction will remain $1,550.
Limitation on itemized deductions
For higher income taxpayers who itemize their deductions, the limitation on itemized deductions will be imposed at income above levels:
• For married couples filing joint returns or surviving spouses, the income threshold will be $313,800.
• For heads of household, the threshold will be $287,650.
• For single taxpayers, the threshold will be $261,500.
• For married taxpayers filing separate returns, the threshold will be $156,900.
The 2017 personal exemption will be $4,050.
The 2017 adoption credit will be $13,570.
Qualified transportation fringe benefits
For taxable years beginning in 2017, the monthly limitation under Code Sec. 132(f)(2)(A) regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $255. The monthly limitation under §132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking will be $255.
Flexible spending arrangements
The limitation on the amount of salary reductions an employee may elect to contribute to a cafeteria plan under an FSA will be $2,600.
Medical savings accounts
Medical savings accounts are available to certain employees of small businesses only when used in conjunction with a “high deductible health plan” whose deductibles are indexed for inflation. For 2017, for individual coverage, the deductible must range from $2,250 to $3,350 with an out-of-pocket maximum of $4,500. For family coverage, the deductible range is $4,500 to $6,750 with an out-of-pocket maximum of $8,250.
Foreign earned income exclusion
The foreign earned income exclusion amount was adjusted for 2017 to $102,100.
For calendar year 2017, an eligible employer may pay certain welders and heavy equipment mechanics an amount of up to $17 per hour for rig-related expenses that is deemed substantiated under an accountable plan if paid in accordance with Rev. Proc. 2002-41, 2002-1 C.B. 1098. If the employer provides fuel or otherwise reimburses fuel expenses, up to $11 per hour is deemed substantiated if paid under Rev. Proc. 2002-41. (IRS News Release IR-2016-139, October 25, 2016; IRS Rev. Proc. 2016-55, October, 25, 2016.)
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