2016 vs. 2017 Federal IRS Tax Brackets, Tax Rates, Standard Deduction and Personal Exemption Updates

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With the continued low inflation environment federal IRS tax brackets, standard deductions and personal exemptions have only moderately increased in the past few years. Federal income tax brackets and related tax items are adjusted annually, under the tax code, to provide for mandatory cost of living adjustments (COLA). The tables and changes below for 2016 and 2017 tax years reflect the latest IRS information (per IRS.gov). Click through the various links for further information on each tax or income item.

Note – Use the 2016 tax brackets for your tax filing in 2017 (covering the 2016 tax year). Scroll down to see the the official 2017 federal IRS tax brackets (filing in 2018) and associated tax changes.

2016 Federal Tax Rates and IRS Marginal Tax Brackets

Tax RateSingleMarried Filing JointlyMarried Filing SeparateHead of Household
10%$0 – $9,275$0 - $18,550$0 – $9,275$0-$13,250
15%$9,275 – $37,650$18,551 - $75,300$9,275 – $37,650$13,251-$50,400
25%$37,651 - $91,150$75,301 - $151,900$37,651 - $75,950$50,401-$130,150
28%$91,151 – $190,150$151,901 - $231,450$75,951 – $115,275$130,151-$210,800
33%$190,151 - $413,350$231,451 - $413,350$115,276 - $206,675$210,801-$413,350
35%$413,351 - $415,050$413,351 - $466,950$206,676 - $233,475$413,351-$441,000
39.6%over $415,050over $466,950over $233,475over $441,000
Personal Exemption$4,050$4,050$4,050$4,050
Std Deduction$6,300$12,600$6,300$9,300
Key 2016 tax updates:

  • Marginal tax rates will remain the same as last year with 39.6% being the highest marginal tax rate. But since tax brackets ranges will increase, people with no income increases will actually see a lower marginal tax rate (see this article for details on this effect). The table above list the detailed changes for each marginal tax bracket – 10, 15, 25, 28, 33, 35 and 39.6 percent
  • The standard deduction rose by $50 for heads of household, but stayed the same in 2016 for single filers  and married people filing separate returns ($6,300).  Married couples filing jointly’s standard deduction also stay flat in 2016 at $12,600.
  • The personal exemption rose by $50.  However, the exemption is subject to a phase-out (per laws enacted a few years ago) that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)
  • The Alternative Minimum Tax (AMT) exemption rose marginally in line with inflation. For tax year 2016, the AMT exemption for single filers  is $53,900 and begins to phase out at $119,700. For married couples filing jointly the AMT exemption is $83,800 and begins to phase out at $159,700. For tax year 2016, the 28 percent AMT tax rate applies to taxpayers with taxable incomes above $186,300 ($93,150 for married individuals filing separately).
  • The maximum Earned Income Credit (EIC) will increased moderately relative to other tax credits given the number of low income people that depend on this. The EITC s $6,269 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,242 for tax year 2015.
  • The gift tax exclusion will remain at $14,000
  • Health Flexible spending arrangements (FSA) employee contribution limits will rise by $50 to $2,550.

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2017 Federal IRS Tax Brackets

See below for the 2017 IRS Tax Brackets, standard deductions and personal exemptions (for taxes paid in 2018). Related changes over 2016 levels are also provided that reflect moderate changes.

2017 Federal Tax Rates and Marginal Tax Brackets

Tax RateSingleMarried Filing JointlyMarried Filing SeparateHead of Household
10%$0 – $9,325$0 - $18,650$0–$9,325$0-$13,350
15%$9,326 – $37,950$18,651 - $75,900$9,376–$37,950$13,351-$50,800
25%$37,951 - $91,900$75,901 - $153,100$37,951-$76,550$50,801-$131,200
28%$91,901 – $191,650$153,101 - $233,350$76,551-$116,675$131,201-$212,500
33%$190,651 - $416,700$233,351 - $416,700$116,676-$208,350$212,501-$416,700
35%$416,701 - $418,400$416,701 - $470,700$208,351-$235,350$416,701-$444,550
39.6%over $418,400over $470,700over $235,350over $444,550
Personal Exemption$4,050$4,050$4,050$4,050
Std Deduction$6,350$12,700$6,350$9,350

Key 2017 tax updates:

  • Marginal tax rates will remain the same as last year with 39.6% being the highest marginal tax rate. Tax brackets ranges will increase in line with COLA, so people with no income increases will actually see a lower marginal tax rate.
  • The standard deduction rises by $50 for heads of household, single and married filling separate filers. Married couples filing jointly’s standard deduction rises by $100 over 2016 levels.
  • The personal exemption stayed flat and did not rise for any filing type group.
  • The Alternative Minimum Tax (AMT) exemption rose marginally in line with inflation. See more on AMT changes here.
  • The maximum Earned Income Tax Credit thresholds will increased moderately relative to other tax credits given the number of low income people that depend on this. See the latest EIC tables,
  • The gift tax exclusion will remain at $14,000
  • Health Flexible spending arrangements (FSA) employee contribution limits will rise by $50 to $2,600 as mandated under the Affordable Care Act. The health FSA pre-tax deduction limit is per employee, per employer per plan year.
  • Foreign earned income exclusion increased by $800 to $102,100.

[2017 Election Update]With Donald Trump elected as President we could see considerable tax changes in the year ahead. See this article for a preview of potential changes.

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3 Comments on "2016 vs. 2017 Federal IRS Tax Brackets, Tax Rates, Standard Deduction and Personal Exemption Updates"

Camille Holser

I heard a rumor that President-elect Trump plans to increase the federal income tax on the lowest incomes from 10% to 12%. I haven’t been able to find out anything about that on fact-checking websites. Is there any truth to that rumor?

Chuck Cumberworth

The spelling of “filing’ is misspelled in your chart column headers on this page. It is spelled correctly in the text info but not in the headers.

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