IRS Announces 2017 Estate, Income Tax Adjustments

The IRS announced the inflation-indexing of many estate and income tax provisions for 2017. The lifetime estate and gift tax exemption will increase to $5,490,000 from $5,450,000 for the estates of those who pass away in 2017. That gives married couples a potential joint exemption of $10,980,000.

The annual gift tax exclusion remains at $14,000 in 2017, where it has been for several years. Under the exclusion, a person can give another person up to $14,000 of money and property during the year without having to file a gift tax return or use part of the lifetime estate and gift tax exemption. The annual exclusion can be used to make gift to an unlimited number of people.

In other income tax changes, the standard deduction for married couples filing jointly will rise

to $12,700. For single taxpayers, the standard deduction will be $6,350. The personal and dependent exemption will be $4,050 but will phase out for taxpayers with adjusted gross incomes between $313,800 and $436,300 for married couples filing jointly and $261,500 to $384,000 for single taxpayers. The maximum 401(k) deferral excluded from income is unchanged at $18,000, and the additional catch-up contribution for those 50 and over remains at $6,000.