1. In regard to retirement plans, the maximum contribution limits
for 2017 are outlined below:
|
Traditional & Roth IRA's for Taxpayers under 50 | $
5,500 |
|
Traditional & Roth IRA's for Taxpayers over 50 | $ 6,500 |
| 401K's
for Taxpayers under 50 | $18,000 |
| 401K's
for Taxpayers over 50 | $24,000 |
| SEP
& Defined Contribution Plans for Taxpayers under 50 | $54,000 |
| SEP
& Defined Contribution Plans for Taxpayers over 50 | $54,000 |
2. For 2017 the IRS allows a deduction for your automobile at various rates depending on the
usage. The details are outlined below:
| Car
used for business | 53.5 cents per mile |
|
Car used for charitable purposes | 14 cents per mile |
|
Car used for medical or moving purposes | 17 cents per mile |
3. Child care tax credits for summer day camp and babysitters are still available for children under 13 years
of age if both parents work.
4. In regard to the "kiddie" tax the law increases the age
from 14 to 18 regarding investment income. If the child is under 25 and still in college and they have investment
income of over $2,100 they will be taxed at their parents' rate instead of the individual rate.
5. The
minimum corporate tax in New Jersey is now based on gross receipts and ranges from $500 to $2,000 for 2017.
6. The New Jersey Homestead rebates for a homeowner now range from $1,000 to $2,000 for 2017.
7. The threshold for the deduction of unreimbursed medical expenses has been increased from
7.5% of your adjusted gross income to 10% for those taxpayers under 65. If you are over 65, the threshold remains at
7.5%.
8. The tax rate on dividend income is 15% for 2017.
9.
The maximum tax rate on capital gains is 15% for 2017 if your taxable income is under $450,000 on a joint return.
If over $450,000, the capital gain rate rises to 20%.
10. A Medicare surtax
of 0.9% will be assessed on W-2 employee compensation or self-employment income if you earn over $250,000 on a joint return.
11. There is a 3.8% Medicare surtax on net investment income if your modified adjusted
gross income is over $250,000 on a joint return. Net investment income includes, interest, dividends, capital gains,
annuities, royalties and passive rental income. It does not include tax-free interest or distributions from retirement
plans and IRA's.
12. For flexible spending accounts (FSA) over the counter medications are no longer eligible.
In 2017, the maximum annual FSA contribution for each employee will be capped at $2,600.
13. Under the
American Opportunity Tax Credit there is a $2,500 maximum credit for qualified higher education expenses such as college.
However the credit phases out for married couples earning over $160,000.
14. In 2017, there are no
estate taxes at the federal level unless your estate is over $5,490,000. In New York the estate must be over
$5,250,000 in order to be taxed. The annual gift tax exclusion is $14,000 per donee in 2017.
In
2017, the exemption from New Jersey Estate tax will increase from $675,000 to $2 million. In 2018, the estate tax will
be totally eliminated in New Jersey. However, the New Jersey Inheritance tax will remain in effect with no change during
the same time period. This is a tax assessed on transfers to beneficiaries other than spouses, parents, or children.
Therefore, it would be imposed on nieces, nephews, siblings and friends. The New Jersey Inheritance tax rates range
from 11% to 16% based on taxable income.
15. If your adjusted gross income is over $311,300
on a joint return, your itemized deductions are reduced by 3%.
16. The Social Security wage base has
increased to $127,200 for 2017. If you start collecting Social Security at age 62, you will be subject to
a 25% discount. If you are between the age of 62-66, you can earn up to $15,120 before losing any benefits. There
is no income restriction of social security benefits after age 66.
17. In 2017, contributions
to HSA Plans are deductible up to $6,750 for family coverage. If over 55, you can deduct an additional $1,000.
18. There will be an increase in the New Jersey Gross Income Tax exclusion for pension and retirement
income over the next 4 years up to $100,000 on a joint return.
19. The New Jersey sales
tax is reduced from 7% to 6.875% starting January 1, 2017 and to 6.625% on January 1, 2018.