Question

Class, what are your thoughts about changing the tax law periodically.?

Answer 1

Various tax changes inevitably occur from year to year. These can range from minor adjustments to the complete elimination of various tax provisions. The Internal Revenue Service has released information on a number of tax changes for the 2017 tax year.

Many federal tax provisions are indexed for inflation, which means they can increase or decrease automatically as one year rolls over into the next.

President Trump's sweeeping tax changes regarding tax brackets and the standard deduction had not yet happened by mid-year. Tax brackets remain the same at 10,15,25,28,33,35,39.6 percent. The only really significant change here relates to who falls into that 39.6 percent tax bracket. As of 2017 , the income limits increase from $415,050 to $418,400 for single taxpayers, and from $466,950 to $470,700 for married tax payers who file joint returns.

Inflation adjustments -

Inflation increases the cost of goods and services for consumers. To ensure that the American taxpyers keep pace with the rising cost of inflation, the IRS periodically adjusts the value of certain deductions and exemptions. With rising deductions and exemptions, you get to protect more of your money from becoming taxable income.