2017 inflation adjustments for income tax and estate tax released

Blog Post

Recently, the Internal Revenue Service released Rev. Proc. 2016-55 outlining the 2017 inflationary adjustments. These adjustments affect various income tax rate thresholds and the estate and gift tax exemption.

Some highlights of the new income tax rates and deductions are as follows:

INCOME TAX 2016 2017
Standard Deduction

6,300 Single

12,600 Married Filing Jointly (MFJ)

6,350 Single

12,700 MFJ

Personal Exemption 4,050 4,050
AMT Exemption

53,900 Single

83,800 MFJ

54,300 Single

84,500 MFJ

Adoption Credit Up to 13,460 Up to 13,570
Max Earned Income Credit 6,269 MFJ w/3+ children 6,318 MFJ w/3+ children
                     TAX RATES

<9,275 Single

<18,550 MFJ

<9,325 Single

<18,650 MFJ


9,275 Single

18,550 MFJ

9,325 Single

18,650 MFJ


37,650 Single

75,300 MFJ

37,950 Single

75,900 MFJ


91,150 Single

151,900 MFJ

131,200 Single

153,100 MFJ


190,150 Single

231,450 MFJ

212,500 Single

233,350 MFJ


413,350 Single

413,350 MFJ

416,700 Single

416,700 MFJ


415,050 Single

466,950 MFJ

444,450 Single

470,700 MFJ

The exemption from the kiddie tax in 2017 remains the same as 2016 at $2,100. If a child's income is more than $1,050 and less than $10,500, a parent can include the child's income on the parents' return.

The estate and gift tax rates are also affected. Currently, an individual may give away during life and at death an amount equal to $5.45 million. In 2017, the amount will rise to $5.49 million, effectively shielding $10.98 million for a married couple.

The annual gift tax exclusion will remain at $14,000, as it has been for the last several years. The amount that may be gifted to a non-citizen spouse is raised in 2017 to $149,000, up from $148,000.

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