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Brief Description of Potential Tax Law Changes for Tax Year 2017 by Intuit (This information can change anytime up to or during Tax Year 2017.)
For individuals dying after 2016, the federal estate tax is increased to $5.49 million exemption and a 40 percent maximum rate.
Social Security Wage Base
The Social Security wage base remains $127,200.
Individual Responsibility Penalties
Penalties are assessed for each month that any individual does not have the minimum essential health insurance coverage. In 2017 the penalty remains at $695 per adult, or 2.5% of income with a family maximum of $2,085.
Premium Tax Credits for Health Coverage
Some taxpayers who obtain health insurance coverage through a qualified marketplace may qualify for health premium tax credits to subsidize the cost of coverage.
Deduction for State and Local Income Taxes
State and local income taxes remains an itemized deduction.
Exclusion From Income of Canceled Debt on Qualified Principal Residence
Debt cancelled from the short sale, foreclosure, or mortgage modification for Qualified Principal Residences is no longer excludable from income under the Mortgage Forgiveness Debt Relief Act. This was extended to the end of 2016. This could also apply to debt that was discharged in 2017 provided that there was a written agreement entered into in 2016.
Standard Deduction for Head of Household Filers
Standard deductions increase from 2016 levels: Single = $6,350, Married Filing Jointly = $12,700, MArried Filing Separately = $6,350, and Head of Household = $9,350.
Personal Exemption Amount Increases
The personal exemption remains $4,050.
Tuition and Fees Deduction
The deduction for tuition and fees is no longer available. The American Opportunity Credit and Lifetime Learning Credit are both still available to qualified taxpayers.
Deduction for Medical Expenses
Starting in 2017, all taxpayers, including those over 65, are now subject to the 10% of Adjusted Gross Income (AGI) threshold for deducting medical expenses.