Each year, the IRS makes inflation adjustments to numerous thresholds, exemptions, exclusions, and other amounts that affect various tax calculations under the Internal Revenue Code. For example, annual inflation adjustments apply to the standard deductions available to taxpayers for income tax purposes, the filing thresholds for each income tax bracket, the amount available for annual exclusion gifts, and the federal gift and estate exemption, just to name a few. With 2016 almost over, it’s a good time to review the 2017 federal tax inflation adjustments to see how they may impact your planning next year.
See IRS release IR-2016-139 summarizing some of the more notable adjustments.
For a complete list of all federal tax provisions impacted by annual inflation adjustments, see Rev. Proc. 2016-55.