Five Tax Changes Affecting Fort Lauderdale Residents in 2017
As the holiday season approaches, the last thing most people in Fort Lauderdale are thinking about is their taxes. Due to changes in tax codes for 2017, a little year-round planning can help you save money when it comes time to pay Uncle Sam. It is especially important for 80 percent of Fort Lauderdale residents that are expected to receive a tax refund. The IRS recently announced several changes in its tax codes for next year. However, it is important to understand these changes will not affect you 2016 fiscal tax returns in the coming months. But it is never too early to get a jump on planning for your 2017 returns. Whether you are a tax attorney in Fort Lauderdale or the average person unfamiliar with tax laws, here are five important factors to remember.
- Inflation will affect tax brackets: Many Fort Lauderdale residents can expect their tax brackets to be adjusted due to inflation. Fortunately, there was not a large shift upwards in the tax schedule. Most people will not be affected. However, if you experience a significant change of income, be prepared to discuss this with your tax preparer.
- Expect an increase in standard deductions: The IRS recently announced standard deductions will increase slightly for 2017. If you are the head of a household or filing individually, you can expect a standard deduction of $9,350 and $6,350 respectfully. It is an increase of $50 compared to 2016. Married couples that file jointly can expect a standard deduction $12,700, that is an increase of $100 from 2016. While these changes are minimal, Fort Lauderdale residents can expect a decrease in their tax liability.
- Expect adjustments in retirement accounts: Countless people in Fort Lauderdale have traditional and Roth IRA accounts. But did you know these retirement accounts can be used to reduce your tax liability? The phase-out range for taking a traditional IRA deduction in 2017 will increase from $62,000 to $72,000 for individual taxpayers in Fort Lauderdale. Married couples that file jointly will see their deductions rise from $99,000 to $119,000. Roth IRA’s are slightly different. There is no standard upfront tax deduction and these accounts can grow tax-free for life. However, the phase-out for individuals to contribute increased $1,000 for a range of $118,000 to $133,000. Married couples who file jointly will see an increase of $2,000 for a range $186,000 to $196,000.
- Some seniors will see changes in medical expense deductions: Many people itemize their medical expenses to receive deductions. To qualify for a deduction, most Fort Lauderdale residents need their medical expenses to exceed their income by 10%. Meanwhile, seniors only had to exceed a threshold of 7.5%. However, starting in 2017, seniors will have to exceed the 10% threshold to be qualified for a deduction.
- Estate tax exemptions will rise minimally: Estates belonging to a descendant that passes away in 2017 will be awarded an exemption of up to $5.49 million. It is an increase of $40,000 from 2016. Very few people in Fort Lauderdale will be affected by this change.
Not everybody is an expert when it comes to Florida tax law. If you are struggling with back taxes or have received an IRS notification for an audit, the best solution is to seek.