Important Tax Law Changes You Need to Know [ Updated for 2017]

Getting psyched to do your taxes? I suppose if you’re expecting a refund you might be.

Or if you’re kind of a tax nerd like me, you might take some pleasure in breaking down the tables and watching the software do its thing.

Either way, here are the tax law changes that apply to the 2017 tax year. Please note, these are the changes that affect your 2017 taxes, not the taxes you paid in 2016.

Important Tax Law Changes

2017 Tax Law Changes

Lets start with some of the basic inflationary changes and what stayed the same:

The U.S. federal income tax brackets remained the same but the income limits did go up slightly for inflation.

  • The standard deduction went up a bit (see below).
  • The child tax credit remains unchanged at $1,000 per child. This credit begins to phase out for married couples filing jointly who make $110,000 or more, and for single filers who make $75,000 or more.
  • The personal and dependent exemption remains the same from 2016, at $4,050.
  • The earned income tax credit rose to $6,318, and the maximum income limit for the credit rose to $53,930. If you took the earned income tax credit for 2016, you might find that your refund is delayed (see below).
  • The foreign earned income exclusion got bumped up to $102,100.
  • The standard mileage rate you can expense if you use your car for business has dropped to 53.5 cents per mile.

More Details About 2017 Tax Law Changes

The Protecting Americans from Tax Hikes (PATH) Act of 2015 may delay your refund. This legislation stipulates that the IRS cannot send credits or refunds for overpayment prior to February 15 for taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit on their taxes. The PATH Act went into effect on January 1, 2017. The new legislation will not affect that amount you can expect to receive from your credit or refund in any way, it will just make early filers wait until after February 15 to receive their checks.

The Saver’s Credit AGI Was Increased Again – They keep making this saver’s credit easier and easier to get into. The adjusted gross income (AGI) limits are now:


  • Married filing jointly is $62,000
  • Head of household is $46,500
  • Single filers is $31,000

Nice that they keep making it easier for folks to save through this credit. I’d love to see stats on the number of people using this credit.

Increased Standard Deduction – If you are one of the lucky few for which life is so simple that the standard deduction does the trick, you are in luck. For the tax year 2017, the standard deductions for all peeps have been upped to keep up with inflation:

  • Married filing jointly is $12,700
  • Single is $6,350
  • Head of household is $9,350

Alternative minimum tax: The exemption amount for tax year 2017 is $84,500 for married couples filing jointly and $54,300 for individuals. This is a bump up from the 2016 amounts, which were $83,800 and $53,900, respectively.

Hey kids, this year the absolute last day to file 2016 taxes (that is, your federal personal income taxes) is April 18th, 2017. Don’t delay!

Previous year changes are on the next page.


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Last Edited: July 26, 2017 @ 5:08 pmThe content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Philip Taylor

Philip Taylor, aka “PT”, is a CPA, financial writer, podcaster, FinCon Founder, husband, and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or Google+. Listen to the new podcast, Masters of Money!

Comments

  1. Unfortunately, no. Nothing really new on the credit side of things. Several credit reductions. 🙁

  2. Bummer! Are there any new and exciting tax credits for 2011?