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New Inflation Estimates from Wolters Kluwer Offer First Look at Impact for Taxpayers in 2017An early glimpse at the income tax picture for 2017 is now available from Wolters Kluwer Tax & Accounting. The new information includes estimated ranges for each 2017 tax bracket as well as projections for a growing number of inflation-sensitive tax figures, such as the personal exemption and the standard deduction. Projections are based on the relevant inflation data recently released by the U.S. Department of Labor. Inflation Adjustments - Background Since the late 1980s, the U.S. Tax Code has required that federal income tax brackets be adjusted for inflation annually, and inflation adjustments have been inserted into the Internal Revenue Code in recent years with increasing frequency. For example, the Code now requires over 50 other inflation-driven computations to determine deduction, exemption and exclusion amounts in addition to the 40 separate computations needed to inflation-adjust the tax bracket schedules each year. Estimates for any of the inflation-adjusted tax figures for 2017, of course, are also necessarily subject to any changes to the tax law that may be made by Congress over the course of the next year. Key Tax Savings, Inflation-Adjusted Projections for 2017: Projections based on the Department of Labor's inflation figures for the 12-month period between August 31, 2015, and August 31, 2016 suggest most taxpayers will experience modest savings, compared to 2016 tax filings. For example:
Other Inflation-adjusted Tax Estimates for 2017:
These inflation-adjusted amounts also trigger a 20-percent tax on that portion of taxable income attributable to net capital gains and qualified dividends that exceed these bracket amounts. Further, a 3.8 percent surtax on net investment income (NII) applies to taxpayers with more than modified adjusted gross income of $200,000 for single filers and $250,000 for joint returns. The NII threshold amounts are not adjusted for inflation each year, making this additional tax more likely to capture a greater number of taxpayers each year.
Wolters Kluwer Tax & Accounting US 2017 Tax Projections* As cited earlier, Wolters Kluwer Tax & Accounting projections for indexed amounts are based on the relevant inflation data released by the U.S. Department of Labor. The IRS usually releases official numbers by November each year. Tax bracket projections are provided for illustrative purposes only, and should not be used for income tax returns or other federal income tax related purposes until confirmed by the IRS later this year, and as subject to amendment by Congress during 2017. Married Filing Jointly (& Surviving Spouse)
Unmarried Individuals (Other Than Surviving Spouses and Heads of Households)
Head of Household
Married Individuals Filing Separate Returns
Standard Deduction Amounts
Standard Deduction for Dependents
Personal Exemption Amounts
Gift Tax Exclusion
* These numbers are projected for the 2016 tax year and have not been confirmed by the Internal Revenue Service (www.irs.org). Media Assistance Expert analysis plus additional details regarding the following projections and tax topics are available for media members interested in speaking with federal tax experts at Wolters Kluwer Tax & Accounting. For interview requests, please contact Laura Gingiss ([email protected]), 847-267-2213. About Wolters Kluwer Tax & Accounting Wolters Kluwer Tax & Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax & Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2015 annual revenues of €4.2 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).
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