2017 IRS Income Tax Brackets, Tax Rates, and Standard Deduction

The IRS will update tax brackets each year for inflation. The 2017 tax brackets were updated to account for inflation and other factors. They are not that different from the 2016 tax brackets as inflation in the United States has been very low.

 

2017 IRS Tax Brackets

The IRS released the 2017 tax brackets (a tabled breakdown of the IRS federal income tax rates) and standard deduction amounts. There will be a number of inflation adjustments over the 2016 tax brackets and standard deductions. Granted, the changes are minimal, given a CPI increase of less than 1% this past year. Thus, the following 2017 IRS income tax brackets are very similar to the 2016 income tax bracket amounts.

 

Married Individuals Filing Joint Returns and Surviving Spouses 2017 Tax Bracket

If Taxable Income Is… The Tax Is…
Not over $18,650 10% of the taxable income
Over $18,650 but not over $75,900 $1,865 plus 15% of the excess over $18,550
Over $75,900 but not over $153,100 $10,452.50 plus 25% of
the excess over $75,900
Over $153,100 but not over $233,350 $29,752.50 plus 28% of
the excess over $153,100
Over $233,350 but not over $416,700 $52,222.50 plus 33% of the excess over $233,350
Over $416.700 but not over $470.700 $112,728 plus 35% of the excess over $470,700
Over $470,700 $131,628 plus 39.6% of
the excess over $470,700

 

Head of Households 2017 Tax Bracket

If Taxable Income Is… The Tax Is…
Not over $13,350 10% of the taxable income
Over $13,350 but not over $50,800 $1,335 plus 15% of the excess over $13,350
Over $50,800 but not over $131,200 $6,952.50 plus 25% of the excess over $50,800
Over $131,200 but not over $212,500 $27,052.50 plus 28% of the excess over $131,200
Over $212,500 but not over $416,700 $49,816.50 plus 33% of the excess over $212,500
Over $416,700 not over $444,500 $116,258.50 plus 35% of the excess over $416,700
Over $444,500 $126,950 plus 39.6% of the excess over $444,500

Unmarried Individuals (other than Surviving Spouses and Heads of Household) 2017 Tax Bracket:

If Taxable Income Is… The Tax Is…
Not over $9,325 10% of the taxable income
Over $9,325 but not over $37,950 $932.50 plus 15% of the excess over $9,325
Over $37,950 but not over $91,900 $5,226.25 plus 25% of the excess over $37,950
Over $91,900 but not over $191,650 $18,713.75 plus 28% of the excess over $91,900
Over $191,650 but not over $416,700 $46,643.75 plus 33% of the excess over $191,650
Over $416,700 but not over $418,400 $120,910.25 plus 35% of the excess over $416,700
Over $418,400 $121,505.25 plus 39.6% of the excess over $418,400

The Federal income tax has 7 brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The amount of tax you owe depends on your income level and filing status. It’s important to understand that moving into a higher tax bracket does not mean that all of your income will be taxed at a higher rate. Instead, only the money that you earn within a particular bracket is subject to that particular tax rate.

2017 Standard Deduction

The standard deduction for single taxpayers and married couples filing separately is $6,350 in 2017, up from $6,300 in 2016; for married couples filing jointly, the standard deduction is $12,700, up $100 from the prior year; and for heads of households, the standard deduction is $9,350 for 2017, up from $9,300.

For 2017, the additional standard deduction amount for the aged or the blind is $1,250. The additional standard deduction amount is increased to $1,550 if the individual is also unmarried and not a surviving spouse.

For 2017, the standard deduction for a taxpayer who can be claimed as a dependent by another taxpayer cannot exceed the greater of (a) $1,050 or (b) $350 + the dependent’s earned income.

Aside from the standard deductions, there are income tax exemptions that can be claimed, whether you itemize your taxes or take the standard deduction. You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer doesn’t actually claim you as a dependent.

 

2017 Personal Exemption

The personal exemption amount for 2017 is $4,050, the same as 2016. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly). Phaseouts will apply to people making certain amounts of income.

 

2017 Earned Income Tax Credit

Earned Income Tax Credit (EITC) for 2017 – The maximum 2017 EITC amount available is $6,318 for taxpayers filing jointly who have 3 or more qualifying children. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds, and phase-outs. The “earned income amount” is the amount of earned income at or above which the maximum amount of the earned income credit is allowed. The “threshold phaseout amount” is the amount of adjusted gross income (or, if greater, earned income) above which the maximum amount of the credit begins to phase out.