What’s New for 2017

For an update on tax developments and a free downloadof the e-Supplement to this book, visit us online at www.jklasser.com.

Tax News for 2017
Item— Highlight—

Tax rate brackets and preferential rates for capital gains/qualified dividends

The 10%, 15%, 25%, 28%, 33%, 35% and 39.6% brackets for 2017 ordinary income reflect an inflation adjustment. The top bracket of 39.6% applies if taxable income exceeds $418,400 for single taxpayers, $444,550 for heads of households, $470,700 for married persons filing jointly and qualifying widows/widowers, and $235,350 for married taxpayers filing separate returns (1.2).

Qualified dividends (4.2) and long-term capital gains (5.3) may escape tax entirely under the 0% rate, or be subject to capital gain rates of 15% or 20% depending on filing status, taxable income, and how much of the taxable income consists of qualified dividends and eligible long-term gains. The 20% capital gain rate has the same taxable income thresholds as the 39.6% ordinary income rate shown above, that is, either $418,400, $444,550, $470,700, or $235,350, depending on filing status. The 0%, 15%, and 20% rates do not apply to long-term gains subject to the 28% rate (collectibles and taxed portion of small business stock) or the 25% rate for unrecaptured real estate depreciation (5.3).

Individual health care mandate and premium tax credit

You are required to have minimum essential health coverage through an employer plan, a government program, ...

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