It appears the GOP has settled on a final tax bill. While it ain’t over till it’s over, we’re close enough that an article on the new 2018 federal income tax rates makes sense.
WASHINGTON, DC – DECEMBER 14: House Speaker Paul Ryan (R-WI), speaks about the Republican tax reform legislation currently before Congress, during his weekly briefing on Capitol Hill December 14, 2017, in Washington, DC. The bill will be voted in the coming week. (Photo by Mark Wilson/Getty Images)
Representing a major tax-overhaul, the bill makes significant changes to the federal income tax brackets and deductions. Let’s look at both, starting with the 2018 income tax brackets.
2018 Income Tax Brackets
|Rate||Individuals||Married Filing Jointly|
|10%||Up to $9,525||Up to $19,050|
|12%||$9,526 to $38,700||$19,051 to $77,400|
|22%||38,701 to $82,500||$77,401 to $165,000|
|24%||$82,501 to $157,500||$165,001 to $315,000|
|32%||$157,501 to $200,000||$315,001 to $400,000|
|35%||$200,001 to $500,000||$400,001 to $600,000|
|37%||over $500,000||over $600,000|
The number of brackets remained the same at seven. Rates overall, however, have come down. For individuals, these lower rates are scheduled to expire in 2025 unless Congress extends them.
The top rate will fall from 39.6% to 37%. The bottom rate remains at 10%, but it covers twice the amount of income compared to the previous brackets.
2018 Standard Deduction and Exemptions
The new tax rules also make big changes to the standard deduction and exemptions.
The standard deduction in 2018 as the law currently exists is $13,000 for a couple filing jointly. That number will jump to $24,000. For single filers it jumps from $6,500 to $12,000.
The personal exemption, currently at $4,150 for 2018, would be repealed. That’s the bad news. The good news the child tax credit gets a big boost.
Original Article at: Forbes