5 Tax Changes Expected in 2017
Not many people like paying tax, but unfortunately it’s something that has to be done to keep the economy growing and all public services intact – so it is something all countries have to implement in their own ways. The IRS is making multiple changes to the tax system and they are expected to come into play at some point in 2017. So whether you are studying for taxation degrees at the Northeastern University, or you simply want to know about the changes for your own personal tax reasons, have a look at some of the tax changes that might affect you this year.
1. Standard Tax Deduction Increase
One of the better tax changes expected to make an appearance in 2017 is an increase in standard tax deduction. It certainly isn’t going to change your lifestyle much, but if you are an individual filer, you can expect your tax deduction to increase by $50. Married couples that file their taxes jointly can expect a $100 increase in their standard deduction.
2. Medical Expense Deduction Changes
Your age will influence whether this tax change affects you. If you are 65 years or older, your medical expenses will have to increase to 10% of your Adjusted Gross Income (AGI) for you to be able to take a deduction – which was previously set at 7.5%. If you are under 65 years old, your medical expense deduction will remain the same at 10% of your AGI.
3. Estate Tax Exemption Increase
The estate tax exemption isn’t a tax change in 2017 that is going to affect a lot of people, but it is one to be considered if a relative passes away in 2017 whilst still owning a property. The estate tax exemption will increase from $5.45 million to $5.49 million.
4. Tax Bracket & Rate Changes
The biggest tax changes in 2017 are the tax bracket and rate changes. Taxable income has increased slightly for higher individual taxpayers from $415,050 in 2016 to $418,400 in 2017. Married couples will also have higher taxable income from $466,950 to $470,700. There are many more changes in the brackets and you should have a look at the changes in the last year to see if this affects you.
5. Lifetime Learning Credit
For joint filers in 2017, the lifetime learning credit will be decreased for those with an average gross income of $112,000, which is up from $111,000 in 2016. This could be a tax change that is something to consider for students studying for an online degree in taxation.
The above tax changes in 2017 might not affect many people, but the tax bracket changes will certainly change a lot of people’s tax returns either in 2017, or when they need to be filed again in 2018. Whatever your situation, when it comes to knowledge of tax, the above changes will give you an insight of what’s to come in 2017, and whether it affects you as a student or a family.
*This is a collaboration post.