Tax Law Changes

The maximum amount of wages in 2017 subject to the 6.2% Social Security tax will rise from $118,500 to $127,200, an increase of more than 7%.
There is no limit on the amount of wages subject to the medicare tax at a rate of 1.45%

The maximum amount of Social Security tax a taxpayer will pay increased from $7,347 in 2016 to $7,883.40 in 2017, an increase of $539.40.

The maximum monthly Social Security benefit a worker can receive at full retirement age is $2,687, which is an increase from the 2016 amount of $2,639.

The maximum earnings a person can earn in the year they reach their full retirement age is $44,880, an increase from the 2016 amount of $41,880.
One dollar in benefits will be withheld for every $3 in earnings above the limit.

A worker under the "full" retirement age can earn up to $16,920 for 2017 which is an increase from the 2016 amount of $15,720. The amount over the allowed amount causes $1 in benefits to be withheld for every $2 earned.

Various energy tax provisions extended through 2014 include: The credit for energy-efficient new homes;
The incentives for biodiesel and renewable diesel;
The credit for nonbusiness energy property;
The credit for alternative fuel vehicle refueling property;
The second-generation biofuel producer credit;
The production credit for Indian coal facilities placed in service before 2009;
The credits with respect to facilities producing energy from certain renewable resources;
The special allowance for second-generation biofuel plant property;
The deduction for energy-efficient commercial buildings;
The special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy for qualified electric utilities;
The excise tax credits relating to certain fuels.

Business tax incentives extended through 2014 include: The increased expensing limitations and treatment of certain real property as Sec. 179 property;
The provision allowing 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements;
The bonus first-year depreciation (for certain property with longer production periods, the property must be placed in service before Jan. 1, 2016);
The exclusion of 100% of gain on certain small business stock;
The allowance for basis adjustments to stock of S corporations making charitable contributions of property;
The reduction in S corporation recognition period for built-in gains tax;
The work opportunity tax credit;
The Research & Development credit;
The temporary minimum low-income housing tax credit rate for non-federally subsidized buildings;
The empowerment zone tax incentives;
The military housing allowance exclusion for determining whether a tenant in certain counties qualifies as low-income under the Housing Assistance Tax Act of 2008,
The Indian employment tax credit;
The new markets tax credit (and carryovers of the unused limitation are extended through 2019);
The railroad track maintenance credit;
The mine rescue team training credit;
The employer wage credit for employees who are active duty members of the uniformed services;
The provision classifying certain race horses as three-year property;
The provision allowing a seven-year recovery period for motorsports entertainment complexes;
The provision allowing accelerated depreciation for business property on an Indian reservation;
The election to accelerate the alternative minimum tax credit in lieu of bonus depreciation (and special rules were added for round 4 extension property);
The enhanced charitable deduction for contributions of food inventory;
The election to expense mine safety equipment;
The special expensing rules for certain film and television productions;
The deduction allowable with respect to income attributable to domestic production activities in Puerto Rico;
The modification of tax treatment of certain payments to controlling exempt organizations;
The treatment of certain dividends of regulated investment companies (RICs);
The treatment of RICs as qualified investment entities under the Foreign Investment in Real Property Tax Act,
The subpart F exception for active financing income;
The look-through treatment of payments between related controlled foreign corporations under foreign personal holding company rules;
The temporary increase in the limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands;
The American Samoa economic development credit under the Tax Relief and Health Care Act of 2006.

Debts that are forgiven or canceled are generally considered taxable income. A notable exception for the years 2007 through 2013 has been available for individuals whose mortgage debt is canceled as a result of a foreclosure, short sale or mortgage restructuring. In those cases, the mortgage debt forgiveness can qualify to be exempt from the income tax.
This special provision expires at the end of 2013. For 2014, mortgage debt that is canceled by a lender as part of a loan restructuring or foreclosure or short sale will be taxable, unless other exception applies.

There are 57 tax provisions set to expire on December 31, 2013, Many taxpayers anticipate that these expiring provisions are going to be retroactively reinstated
Some popular ones that will effect some taxpayers are: Classroom Expenses Deduction for teachers, principals, and other K-12 educators can deduct up to $250 of their job-related expenses as an above-the-line deduction. This deduction expires at the end of 2013. For 2014, educators will be able to deduct their classroom expenses only as part of the employee business expense itemized deduction.