Every year the IRS makes adjustments to retirement contribution limitations for inflation. For 2017, most savings contribution limits remained the same with the exception of the SEP/401(k) and individual HSA limits. The maximum SEP / 401(k) contributions went up from $53,000 to $54,000 (plus $6,000 for those age 50 and older). The individual HSA contribution limit went from $3,350 to $3,400 (plus $1,000 for those age 55 and older). Below are the contribution limits for 2017.
Traditional IRA contributions are limited based on income if you also participate in an employer-sponsored retirement plan. Roth IRA contributions are limited based on income regardless of your participation in an employer-sponsored retirement plan. These income limitations as well as the phase out are as follows:
|Standard Deduction:||Single: $6,350 (up from $6,300)
Married: $12,700 (up from $12,600)
This is a small increase to the standard deduction which will reduce the tax owed for those who do not itemize deductions.
|Medical expense deduction:||Above 10% of AGI for all taxpayers (previously 7.5% for those 65 and older)
Seniors will have the same hurdle as younger taxpayers to claim an itemized deduction for medical expenses.
|Social Security wage base:||$127,200 (up from $118,500)
This large increase in the Social Security wage base means that individuals who reach the max on Social Security taxes will owe an additional $539 this year.
|Estate tax exemption:||$5.49M (up from $5.45M)
For those with taxable estates, the exemption goes up slightly.