The New Year is upon us which means the Internal Revenue Service has set the limits on contributions to qualified plans for the 2017 calendar year. Some items increased but others remained the same. So here are the contribution limits in 2017.
The gift tax exclusion is $14,000, which is the same as 2016. But the Estate Tax Exemption, Gift Tax Exemption and Generation-Skipping Transfer Exemption each went to $5,490,000, which is a $40,000 increase over 2016.
Increases in Standard Deductions
The standard deduction for married taxpayers filing joint returns increased slightly to $12,700, a $100 increase from 2015 and 2016. It also increased slightly for single taxpayers and married taxpayers filing separately to $6,350, an increase of $50. The standard deduction increased for heads of households from $9,300 in 2016 to $9,350 in 2016.
Provision Made Permanent
Since 2009 taxpayers have been allowed a $2,500 credit for up to four years of post-secondary education expenses subject to certain phase-outs. Starting in 2017, however, the credit was set to revert to a maximum of $1,800 with lower phase-out thresholds. The tax extender bill makes this credit permanent at the $2,500 level.
The companies of National Life Group® and their representatives do not offer tax or legal advice. Please encourage your clients to seek tax or legal advice from their appropriate professional advisor.