On behalf of Silver Tax Group posted in Tax Law on Wednesday, November 22, 2017.
As we near the end of 2017, you can’t turn anywhere without hearing about taxes. Tax reform is in the news. Ads for Black Friday and Christmas deals on tax software start to flood the airwaves. Businesses start to send their employees notices that they need to have all of their expenses in by the end of the calendar year or their soon-to-arrive end of the tax year.
But what does all of this tax talk mean for the average taxpayer?
To figure this out, we need to look past the situations noted above and go directly to the source of all tax topics – the Internal Revenue Service (IRS).
Changes in tax
A recent IRS publication indicates that the three following changes are in store for taxpayers.
The personal exemption will rise
Today, the personal exemption sits at $4,050 for individuals who make less than $266,700 and couples who file joint returns and make $320,000. Next year, the exemption will rise $100 (roughly 2.5 percent ) to a total of $4,150.
The standard deduction goes up
In 2018, the standard deduction will be $6,500 for individuals and $13,000 for married couples. That is an increase of $150 (2.4 percent) for individuals and $300 (also 2.4 percent) for couples.
Retirement plan contribution limits climb
The 2017 limit of $18,000 to retirement plans will become $18,500 in 2018. This 2.8 percent increase applies on a per-employee basis.