|Tax News for 2017|
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 ...