Income tax planning can help you be better prepared for tax season and make your life a lot easier. Yet predicting taxes is always tough, and given the calls for tax reform in Washington, knowing exactly what your 2017 taxes will be simply isn't possible. However, based on current tax law and the most popular proposals on the table, you can get a good read on your tax situation for the coming year. For someone on the top end of the income spectrum making $120,000 a year, that's especially critical.

What a $120,000 earner would pay in taxes in 2016

When some people wonder about 2017 taxes, they're actually talking about what they'll owe in 2017 on their return for the 2016 tax year. Fortunately, 2016's tax laws are locked in, so you can figure out what your tax liability will be come April. Of course, every taxpayer's situation will vary according to filing status, family size, and the types of income and expenses you have and the tax breaks for which they can qualify.

Tax forms.

Image source: Getty Images.

As a simple example, though, consider two hypothetical taxpayers. One is single with no children, takes the standard deduction, and contributes $5,000 to a deductible retirement plan. The other is married, files jointly, has two children, takes the standard deduction, and makes the same $5,000 contribution to an IRA or 401(k) plan.

When you run the numbers on this example, here's what you get for the 2016 tax year:

Category

Single Example

Married Example

Starting earnings

$120,000

$120,000

Retirement account contribution

($5,000)

($5,000)

Standard deduction

($6,300)

($12,600)

Personal exemptions

($4,050)

($16,200)

Taxable income

$104,650

$86,200

Tentative tax

$22,339

$13,093

Child tax credit

$0

$1,750

Final tax bill

$22,339

$11,343

Calculations by author.

Note that the child tax credit amount gets reduced from its standard $1,000 per child amount. That's because your modified adjusted gross income of $115,000 -- earnings less the retirement account contribution -- is above the $110,000 threshold at which the child tax credit starts getting phased out. For every $1,000 above the threshold, taxpayers lose $50 of the child tax credit.

What 2017 looks like right now

Assuming that tax reform doesn't lead to any changes in 2017, then the calculation doesn't change much. Some minor adjustments due to inflation reduce tax levels slightly.

Category

Single Example

Married Example

Starting earnings

$120,000

$120,000

Retirement account contribution

($5,000)

($5,000)

Standard deduction

($6,350)

($12,700)

Personal exemptions

($4,050)

($16,200)

Taxable income

$104,600

$86,100

Tentative tax

$22,270

$13,003

Child tax credit

$0

$1,750

Final tax bill

$22,270

$11,253

Calculations by author.

What Trump tax reforms would do to 2017 taxes

The Trump tax plan has proposed changes to the way that taxes get calculated. Retirement account contributions are still available for deductions, but personal exemptions would get wrapped into a larger standard deduction. Based on details that are currently available, the proposed tax brackets in the plan would produce the following tax bill:

Category

Single Example

Married Example

Starting earnings

$120,000

$120,000

Retirement account contribution

($5,000)

($5,000)

Standard deduction

($15,000)

($30,000)

Taxable income

$100,000

$85,000

Tentative tax

$20,125

$11,500

Child tax credit

$0

$1,750

Final tax bill

$20,125

$9,750

Calculations by author.

The example above assumes that similar treatment of the child tax credit survives tax reform. That's not a certainty, but it seems likely because of the credit's popularity. Most of the reduction in taxes compared to current law comes from the integration of current 10% and 15% brackets into a wider 12% bracket.

How will 2017 taxes end up?

Tax reform efforts have already begun, and it's not too late for a bill passed midyear to be retroactive to the beginning of 2017. There's even precedent for bills not passed until after the year ends to apply back to the previous year. However, tensions between lawmakers on Capitol Hill and President Trump's administration have caused some to doubt whether tax reform is possible this year.

In the end, your tax bill is likely to fall somewhere in the range of what these proposals suggest. With these estimates, you can get an early start on planning for how much you'll owe when tax season rolls around next year.