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2017 TAX LEGISLATION UPDATE

INDIVIDUAL PROVISIONS

Tax Brackets

The following tax brackets are for the years beginning January 1, 2018.

Single
Married Filing Joint
Married Filing Separate
Head of Household
Bracket

$0 - $9,525
$0 - $19,050
$0 - $9,525
$0 - $13,600
10%

$9,525 - $38,700
$19,050 - $77,400
$9,525 - $38,700
$13,600 - $51,800
12%

$38,700 - $82,500
$77,400 - $165,000
$38,700 - $82,500
$51,800 - $82,500
22%

$82,500 - $157,500
$165,000 - $315,000
$82,500 - $157,500
$82,500 - $157,500
24%

$157,500 - $200,000
$315,000 - $400,000
$157,500 - $200,000
$157,500 - $200,000
32%

$200,000 - $500,000
$400,000 - $600,000
$200,000 - $300,000
$200,000 - $500,000
35%

$500,000 +
$600,000 +
$300,000 +
$500,000 +
37%

 

Standard Deduction

The standard deduction has been nearly doubled, which means the number of taxpayers who itemize will drop drastically.

Which tax-advantaged health account should be part of your benefits package?

On October 12, an executive order was signed that, among other things, seeks to expand Health Reimbursement Arrangements (HRAs). HRAs are just one type of tax-advantaged account you can provide your employees to help fund their health care expenses. Also available are Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Which one should you include in your benefits package? Here’s a look at the similarities and differences: HRA. An HRA is an employer-sponsored account that reimburses employees for medical expenses.

Watch out for potential tax pitfalls of donating real estate to charity

Charitable giving allows you to help an organization you care about and, in most cases, enjoy a valuable income tax deduction. If you’re considering a large gift, a noncash donation such as appreciated real estate can provide additional benefits. For example, if you’ve held the property for more than one year, you generally will be able to deduct its full fair market value and avoid any capital gains tax you’d owe if you sold the property.

A charitable remainder trust can provide a multitude of benefits

If you’re charitably inclined but concerned about having sufficient income to meet your needs, a charitable remainder trust (CRT) may be the answer. A CRT allows you to support a favorite charity while potentially boosting your cash flow, shrinking the size of your taxable estate, reducing or deferring income taxes, and enjoying investment planning advantages.

“Bunching” medical expenses will be a tax-smart strategy for many in 2017

Various limits apply to most tax deductions, and one type of limit is a “floor,” which means expenses are deductible only if they exceed that floor (typically a specific percentage of your income). One example is the medical expense deduction. Because it can be difficult to exceed the floor, a common strategy is to “bunch” deductible medical expenses into a particular year where possible.

Beware the GST tax when transferring assets to grandchildren

As you plan your estate, don’t overlook the generation-skipping transfer (GST) tax. Despite a generous $5.49 million GST tax exemption, complexities surrounding its allocation can create several tax traps for the unwary. GST basics The GST tax is a flat, 40% tax on transfers to “skip persons,” including grandchildren, other family members more than a generation below you, nonfamily members more than 37½ years younger than you and certain trusts (if all of their beneficiaries are skip persons). If your child predeceases his or her children, however, they’re no longer considered skip persons.

3 midyear tax planning strategies for business

Tax reform has been a major topic of discussion in Washington, but it’s still unclear exactly what such legislation will include and whether it will be signed into law this year. However, the last major tax legislation that was signed into law — back in December of 2015 — still has a significant impact on tax planning for businesses.