Trump’s Personal Tax Rates Changes 2017 vs 2018

tax stampH.R. 1, known as the Tax Cuts and Jobs Act, which both houses of Congress passed on Dec. 20, contains a large number of provisions that affect individual taxpayers. However, to keep the cost of the bill within Senate budget rules, all of the changes affecting individuals expire after 2025. At that time, if no future Congress acts to extend H.R. 1’s provision, the individual tax provisions would sunset, and the tax law would revert to its current state.

Here is a look at many of the provisions in the bill affecting individuals.

Special brackets will apply for certain children with unearned income.

Personal Tax rates

For tax years 2018 through 2025, the following rates apply to individual taxpayers:

Single taxpayers

Taxable income over But not over Is taxed at
$0 $9,525 10%
$9,525 $38,700 12%
$38,700 $82,500 22%
$82,500 $157,500 24%
$157,500 $200,000 32%
$200,000 $500,000 35%
$500,000   37%


Heads of households

Taxable income over But not over Is taxed at
$0 $13,600 10%
$13,600 $51,800 12%
$51,800 $82,500 22%
$82,500 $157,500 24%
$157,500 $200,000 32%
$200,000 $500,000 35%
$500,000   37%


Married taxpayers filing joint returns and surviving spouses

Taxable income over But not over Is taxed at
$0 $19,050 10%
$19,050 $77,400 12%
$77,400 $165,000 22%
$165,000 $315,000 24%
$315,000 $400,000 32%
$400,000 $600,000 35%
$600,000   37%


Married taxpayers filing separately

Taxable income over But not over Is taxed at
$0 $9,525 10%
$9,525 $38,700 12%
$38,700 $82,500 22%
$82,500 $157,500 24%
$157,500 $200,000 32%
$200,000 $300,000 35%
$300,000   37%


Estates and trusts

Taxable income over But not over Is taxed at
$0 $2,550 10%
$2,550 $9,150 24%
$9,150 $12,500 35%
$12,500   37%

 

To Compare, In 2017, the income limits for all tax brackets and all filers will be adjusted for inflation and will be as follows (Table 1). The top marginal income tax rate of 39.6 percent will hit taxpayers with taxable income of $418,400 and higher for single filers and $470,700 and higher for married couples filing jointly.

Table 1. Single Taxable Income Tax Brackets and Rates, 2017
Rate Taxable Income Bracket Tax Owed
10% $0 to $9,325 10% of Taxable Income
15% $9,325 to $37,950 $932.50 plus 15% of the excess over $9,325
25% $37,950 to $91,900 $5,226.25 plus 25% of the excess over $37,950
28% $91,900 to $191,650 $18,713.75 plus 28% of the excess over $91,900
33% $191,650 to $416,700 $46,643.75 plus 33% of the excess over $191,650
35% $416,700 to $418,400 $120,910.25 plus 35% of the excess over $416,700
39.60% $418,400+ $121,505.25 plus 39.6% of the excess over $418,400

 

Table 2. Married Filing Joint Taxable Income Tax Brackets and Rates, 2017
Rate Taxable Income Bracket Tax Owed
10% $0 to $18,650 10% of taxable income
15% $18,650 to $75,900 $1,865 plus 15% of the excess over $18,650
25% $75,900 to $153,100 $10,452.50 plus 25% of the excess over $75,900
28% $153,100 to $233,350 $29,752.50 plus 28% of the excess over $153,100
33% $233,350 to $416,700 $52,222.50 plus 33% of the excess over $233,350
35% $416,700 to $470,700 $112,728 plus 35% of the excess over $416,700
39.60% $470,700+ $131,628 plus 39.6% of the excess over $470,700

 

Table 3. Head of Household Taxable Income Tax Brackets and Rates, 2017
Rate Taxable Income Bracket Tax Owed
10% $0 to $13,350 10% of taxable income
15% $13,350 to $50,800 $1,335 plus 15% of the excess over $13,350
25% $50,800 to $131,200 $6,952.50 plus 25% of the excess over $50,800
28% $131,200 to $212,500 $27,052.50 plus 28% of the excess over $131,200
33% $212,500 to $416,700 $49,816.50 plus 33% of the excess over $212,500
35% $416,700 to $444,500 $117,202.50 plus 35% of the excess over $416,701
39.60% $444,550+ $126,950 plus 39.6% of the excess over $444,550
Source: IRS.

 

We all hope that we can save money on our taxes to use in other ways. To see how, contact Rosillo & Associates, PA, A Certified Public Accounting Firm specializing in U.S Tax and Foreign Disclosure Compliance.

Publicado en Tax Planning