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Unformatted text preview: Department of the Treasury Your Federal Income Tax For Individuals Publication 17 Catalog Number 10311G For use in preparing 2017 Returns Internal Revenue Service TAX GUIDE 2017 Get forms and other information faster and easier at: • IRS.gov (English) • IRS.gov/Spanish (Español) Dec 12, 2017 • IRS.gov/Chinese (中文) • IRS.gov/Korean (한국어) • IRS.gov/Russian (Pусский) • IRS.gov/Vietnamese (TiếngViệt) Department of the Treasury Internal Revenue Service Your Federal Income Tax For Individuals Contents What's New ....................... 1 Reminders . . . . . . . . . . . . . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 2 Part One. The Income Tax Return . . . . . 1 Filing Information . . . . . . . . . . . . 2 Filing Status . . . . . . . . . . . . . . . 3 Personal Exemptions and Dependents 4 Tax Withholding and Estimated Tax . .... .... .... ... .... Part Two. Income . . . . . . . . . . . . . . . . 5 Wages, Salaries, and Other Earnings . 6 Tip Income . . . . . . . . . . . . . . . . 7 Interest Income . . . . . . . . . . . . . . 8 Dividends and Other Distributions . . . 9 Rental Income and Expenses . . . . . . 10 Retirement Plans, Pensions, and Annuities . . . . . . . . . . . . . . . . . 11 Social Security and Equivalent Railroad Retirement Benefits . . . . . . . . . . . 12 Other Income . . . . . . . . . . . . . . . . . . . . . Part Three. Gains and Losses . . 13 Basis of Property . . . . . . . 14 Sale of Property . . . . . . . 15 Selling Your Home . . . . . . 16 Reporting Gains and Losses . . . . . . . . . . . . . . . . . . . . . . . . . Part Four. Adjustments to Income . . . . 17 Individual Retirement Arrangements (IRAs) . . . . . . . . . . . . . . . . 18 Alimony . . . . . . . . . . . . . . . . 19 Education-Related Adjustments . . . . . . . . . . . . . . . . . . . . . . . . 4 4 20 25 38 47 47 55 57 65 69 . . . 77 . . . 85 . . . 89 . . . . . 100 100 104 111 118 . . . . 121 . . . . 122 . . . . 134 . . . . 137 Part Five. Standard Deduction and Itemized Deductions . . . . . . . . . . . . . . . . . . . . 141 20 Standard Deduction . . . . . . . . . . . . . 141 All material in this publication may be reprinted freely. A citation to Your Federal Income Tax (2017) would be appropriate. The explanations and examples in this publication reflect the interpretation by the Internal Revenue Service (IRS) of: Tax laws enacted by Congress, Treasury regulations, and Court decisions. However, the information given does not cover every situation and is not intended to replace the law or change its meaning. 21 Medical and Dental Expenses . . . . . . . 145 22 Taxes . . . . . . . . . . . . . . . . . . . . . 150 23 Interest Expense . . . . . . . . . . . . . . . 155 24 Contributions . . . . . . . . . . . . . . . . . 163 25 Nonbusiness Casualty and Theft Losses . . . . . . . . . . . . . . . . . . . . 171 26 Car Expenses and Other Employee Business Expenses . . . . . . . . . . . . . . . . . . 177 27 Tax Benefits for Work-Related Education . . . . . . . . . . . . . . . . . . 194 28 Miscellaneous Deductions . . . . . . . . . 199 29 Limit on Itemized Deductions . . . . . . . . 204 Part Six. Figuring Your Taxes and Credits 30 How To Figure Your Tax . . . . . . . . 31 Tax on Unearned Income of Certain Children . . . . . . . . . . . . . . . . 32 Child and Dependent Care Credit . . 33 Credit for the Elderly or the Disabled . 34 Child Tax Credit . . . . . . . . . . . . 35 Education Credits . . . . . . . . . . . 36 Earned Income Credit (EIC) . . . . . . 37 Premium Tax Credit (PTC) . . . . . . 38 Other Credits . . . . . . . . . . . . . . 2017 Tax Table . . . 206 . . . 206 . . . . . . . . . . . . . . . . . . . . . . . . 209 213 220 223 224 230 245 248 . . . . . . . . . . . . . . . . . . . . 253 2017 Tax Computation Worksheet . . . . . . . . 265 2017 Tax Rate Schedules . . . . . . . . . . . . . . 266 Your Rights as a Taxpayer . . . . . . . . . . . . . 267 How To Get Tax Help Index . . . . . . . . . . . . . . . . 269 . . . . . . . . . . . . . . . . . . . . . . . . . . 270 Where To File . . . . . . . . . . . . . . . . . . . . . 289 This publication covers some subjects on which a court may have made a decision more favorable to taxpayers than the interpretation by the IRS. Until these differing interpretations are resolved by higher court decisions or in some other way, this publication will continue to present the interpretations by the IRS. All taxpayers have important rights when working with the IRS. These rights are described in Your Rights as a Taxpayer in the back of this publication. What's New This section summarizes important tax changes that took effect in 2017. Most of these changes are discussed in more detail throughout this publication. To learn whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at IRS.gov/Pub17. Future developments. For the latest information about the tax law topics covered in this publication, such as legislation enacted after it was published, go to IRS.gov/ Pub17. Casualty and theft losses. Disaster relief enacted for those impacted by Hurricane Harvey, Irma, or Maria includes a provision that modified the calculation of casualty and theft losses. See Pub. 976, Disaster Relief, for more information. Earned income credit (EIC) and additional child tax credit (ACTC). Disaster relief enacted for those impacted by Hurricane Harvey, Irma, or Maria allows prior year earned income to be elected as 2017 earned income when figuring both the 2017 EIC and the 2017 ACTC. See Pub. 976 for more information. Increased standard deduction. In addition to the annual increase due to inflation adjustments, your 2017 standard deduction is increased by any net disaster loss due to Hurricane Harvey, Irma, or Maria. To claim the increased standard deduction, you must file Form 1040. See Pub. 976 for more information. Due date of return. File your tax return by April 17, 2018. The due date is April 17, instead of April 15, because of the Emancipation Day holiday in the District of Columbia—even if you do not live in the District of Columbia. See chapter 1. Secure access. To combat identity fraud, the IRS has upgraded its identity verification process for certain self-help tools on IRS.gov. To find out what types of information new users will need, go to IRS.gov/ SecureAccess. Childless EIC. You may be able to qualify for the EIC under the At the time this publication went to print, Congress CAUTION was considering legislation that would do the following. ! 1. Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires. 2. Extend certain tax benefits that expired at the end of 2016 and that currently can't be claimed on your 2017 tax return, such as: a. The credit for nonbusiness energy property, b. Parts of the credit for residential energy property, c. The deduction for mortgage insurance premiums, d. 7.5% of adjusted gross income threshold for deducting medical and dental expenses, e. The credit for alternative fuel vehicle refueling property, and f. The deduction for tuition and fees. 3. Change certain other tax provisions. rules for taxpayers without a qualifying child if you have a qualifying child for the EIC who is claimed as a qualifying child by another taxpayer. For more information, see chapter 36. Access your online account. You must authenticate your identity. To securely log in to your federal tax account, go to IRS.gov/ Account. View the amount you owe, review 18 months of payment history, access online payment options, and create or modify an online payment agreement. You can also access your tax records online. Personal exemption amount increased for certain taxpayers. Your personal exemption is $4,050. But the amount is reduced if your adjusted gross income is more than: $156,900 if married filing separately, $261,500 if single, $287,650 if head of household, or $313,800 if married filing jointly or qualifying widow(er). See chapter 3. Limit on itemized deductions. You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than: $156,900 if married filing separately, $261,500 if single, $287,650 if head of household, or $313,800 if married filing jointly or qualifying widow(er). vehicle is 53.5 cents a mile. The 2017 rate for use of your vehicle to get medical care or to move is 17 cents a mile. See Pub. 521, Moving Expenses. Adoption credit. The adoption credit and the exclusion for employer-provided adoption benefits have both increased to $13,570 per eligible child in 2017. The amount begins to phase out if you have modified adjusted gross income (MAGI) in excess of $203,540 and is completely phased out if your MAGI is $243,540 or more. Exemption amount for alternative minimum tax (AMT). The exemption amount for the AMT has increased to $54,300 ($84,500 if married filing jointly or qualifying widow(er); $42,250 if married filing separately). Standard deduction. For 2017, the standard deduction has increased to $6,350 if single; $12,700 if married filing jointly or qualifying widow(er); $6,350 if married filing separate returns; and $9,350 if head of household. Mailing your return. If you live in Connecticut, the District of Columbia, Maryland, Pennsylvania, Rhode Island, or West Virginia and you are mailing in your return, you will need to mail it to a different address this year. See Where To File near the end of this publication. Employer identification number (EIN) needed to claim the American opportunity credit. To claim the American opportunity credit, you need to have the EIN of the institution to which your qualified expenses were paid. See chapter 35. See chapter 29. Standard mileage rates. The 2017 rate for business use of your Reminders Listed below are important reminders and other items that may help you file your 2017 tax return. Many of these items are explained in more detail later in this publication. Enter your social security number (SSN). Enter your SSN in the space provided on your tax form. If you filed a joint return for 2016 and are filing a joint return for 2017 with the same spouse, enter your names and SSNs in the same order as on your 2016 return. See chapter 1. Publication 17 (2017) Secure your tax records from identity theft. Identity theft occurs when someone uses your personal information, such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund. For more information about identity theft and how to reduce your risk from it, see chapter 1. Taxpayer identification numbers. You must provide the taxpayer identification number for each person for whom you claim certain tax benefits. This applies even if the person was born in 2017. Generally, this number is the person's SSN. See chapter 1. Foreign-source income. If you are a U.S. citizen with income from sources outside the United States (foreign income), you must report all such income on your tax return unless it is exempt by law or a tax treaty. This is true whether you live inside or outside the United States and whether or not you receive a Form W-2 or Form 1099 from the foreign payer. This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). If you live outside the United States, you may be able to exclude part or all of your foreign earned income. For details, see Pub. 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. Foreign financial assets. If you had foreign financial assets in 2017, you may have to file Form 8938 with your return. Check Form Page 1 8938 and its instructions or IRS.gov/Form8938 for details. Automatic 6-month extension to file tax return. You can get an automatic 6-month extension of time to file your tax return. See chapter 1. Include your phone number on your return. To promptly resolve any questions we have in processing your tax return, we would like to be able to call you. Please enter your daytime telephone number on your tax form next to your signature and occupation. If you are filing a joint return, you can enter either your or your spouse's daytime phone number. Payment of taxes. You can pay your taxes online, by phone, by mobile device, in cash, or by check or money order. You can make a direct transfer from your bank account or use a credit or debit card. See chapter 1. Faster ways to file your return. The IRS offers fast, accurate ways to file your tax return information without filing a paper tax return. You can use IRS e-file (electronic filing). See chapter 1. Free electronic filing. You may be able to file your 2017 taxes online for free. See chapter 1. Change of address. If you change your address, notify the IRS. See chapter 1. Refund on a late filed return. If you were due a refund but you did not file a return, you generally must file your return within 3 years from the date the return was due (including extensions) to get that refund. See chapter 1. Frivolous tax returns. The IRS has published a list of positions that are identified as frivolous. The penalty for filing a frivolous tax return is $5,000. See chapter 1. Filing erroneous claim for refund or credit. You may have to pay a penalty if you file an erroneous claim for refund or credit. See chapter 1. Privacy Act and paperwork reduction information. The IRS Restructuring and Reform Act of 1998, the Privacy Act of 1974, and the Paperwork Reduction Act of 1980 require that when we ask you for information we must first tell you what our legal right is to ask for the information, why we are asking for it, how it will be used, what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory under the law. A complete statement on this subject can be found in your tax form instructions. Preparer e-file mandate. Most paid preparers must e-file returns they prepare and file. Your preparer may make you aware of this requirement and the options available to you. waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (call 1-800-877-8339 if you are deaf, hard of hearing, or have a speech disability, and are using TTY/TDD equipment). You can remain anonymous. Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Treasury Inspector General for Tax Administration. If you want to confidentially report misconduct, Introduction This publication covers the general rules for filing a federal income tax return. It supplements the information contained in your tax form instructions. It explains the tax law to make sure you pay only the tax you owe and no more. How this publication is arranged. This publication closely follows Form 1040, U.S. Individual Income Tax Return. It is divided into six parts which cover different sections of Form 1040. Each part is further divided into chapters which generally discuss one line of the form. Do not worry if you file Form 1040A or Form 1040EZ. Anything included on a line of either of these forms is also included on Form 1040. The table of contents inside the front cover and the index in the back of the publication are useful tools to help you find the information you need. What is in this publication. The publication begins with the rules for filing a tax return. It explains: 1. Who must file a return, 2. Which tax form to use, 3. When the return is due, 4. How to e-file your return, and 5. Other general information. Page 2 It will help you identify which filing status you qualify for, whether you can claim any dependents, and whether the income you receive is taxable. The publication goes on to explain the standard deduction, the kinds of expenses you may be able to deduct, and the various kinds of credits you may be able to take to reduce your tax. Throughout the publication are examples showing how the tax law applies in typical situations. Also throughout the publication are flowcharts and tables that present tax information in an easy-to-understand manner. Many of the subjects discussed in this publication are discussed in greater detail in other IRS publications. References to those other publications are provided for your information. Icons. Small graphic symbols, or icons, are used to draw your attention to special information. See Table 1 for an explanation of each icon used in this publication. What is not covered in this publication. Some material that you may find helpful is not included in this publication but can be found in your tax form instruction booklet. This includes lists of: Where to report certain items shown on information documents, and Tax Topics you can read at IRS.gov/TaxTopics. If you operate your own business or have other self-employment income, such as from babysitting or selling crafts, see the following publications for more information. Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ). Pub. 535, Business Expenses. Pub. 587, Business Use of Your Home (Including Use by Daycare Providers). Help from the IRS. There are many ways you can get help from the IRS. These are explained under How To Get Tax Help at the end of this publication. Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions. You can send us comments through IRS.gov/FormComments. Or you can write to: Internal Revenue Service Tax Forms and Publications 1111 Constitution Ave. NW, IR-6526 Washington, DC 20224 Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Ordering forms and publications. Visit IRS.gov/FormsPubs to download forms and publications. Otherwise, you can go to IRS.gov/ OrderForms to order current and prior-year forms and instructions. Your order should arrive within 10 business days. Tax questions. If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication. IRS mission. Provide America's taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all. Publication 17 (2017) Table 1. Legend of Icons Icon ! CAUTION Explanation Items that may cause you particular problems, or an alert about pending legislation that may be enacted after this publication goes to print. An Internet site or an email address. An address you may need. Items you should keep in your personal records. RECORDS Items you may need to figure or a worksheet you may need to complete and keep for your records. An important phone number. TIP Publication 17 (2017) Helpful information you may need. Page 3 Part One. The Income Tax Return mailing in your return, you will need to mail it to a different address this year. See Where To File near the end of this publication. 1. Filing Information What's New ! CAUTION At the time this publication went to print, Congress was considering legislation that would do the following. 1. Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires. 2. Extend certain tax benefits that expired at the end of 2016 and that currently can't be claimed on your 2017 tax return. 3. Change certain other ...
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  • Spring '17
  • Revenue, Taxation in the United States

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