There are several adjustments and new legislation being implemented in 2017 which may prove advantageous to many taxpayers. The following list, while not all-inclusive, contains a number of the important changes that taxpayers should be aware of as we begin the new year.
Retirement Plan Contribution Limits:
- Employee deferrals to 401(k), 403(b), qualified 457 and other qualified plans remain static in 2017 a t$18,000, with a $6,000 catch-up for those age 50 and older. Total additions to defined contribution plans and SEP IRAs increased to $54,000 (from $53,000 in 2016). Traditional and Roth IRA limits remain at$5,500 with a $1,000 catch-up and SIMPLE IRAs remain at $12,500 with a $3,000 catch-up.
Slight Increase for Social Security:
- There is a 0.3% cost of living increase for Social Security and SSI benefits in 2017. Additionally, the maximum taxable earnings subject to Social Security taxes increases to $127,200 (from $118,500 in 2016)and recipients under full retirement age may earn up to $16,920 in 2017 without benefit reduction.
Increased Estate Exemption:
- The federal estate tax exemption amount increases to $5.49 million in 2017 (up from $5.45 million in 2016), while the annual gift tax exclusion remains at$14,000 ($28,000 if utilizing gift-splitting with a spouse).
New FAFSA Timeline for 2017/2018:
- Starting with the 2017/2018 academic year, families are able to file the Free Application for Federal Student Aid, or FAFSA, three months earlier. The earlier submission date of Oct. 1, 2016 (previously would have been Jan. 1, 2017) requires families toreport 2015 income information as the basis for 2017/2018 school year.
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