We are beginning the New Year with a new tax law. This page will detail many of the changes that are important. Let’s start with individual tax rates.
In order to show the effects of the bracket and rate changes there are comparative examples of tax liability based on specified levels of taxable income (very interesting). Keep in mind that taxable income at the most basic level is gross income less the standard deduction. The standard deduction for 2018 is $12,000 for singles, $18,000 for heads of household and $24,000 for married filing jointly versus $6,350, $9,350, and $12,700 for 2017, respectively.
Examples - Comparison of Tax Liability
Single Taxpayer
| Taxable Income | 2018 Tax | 2017 Tax | Dollar Reduction |
|---|---|---|---|
| $9,525 | $953 | $963 | $10 |
| $38,700 | $4,454 | $5,414 | $960 |
| $82,500 | $14,090 | $16,364 | $2,274 |
| $157,500 | $32,090 | $37,082 | $4,992 |
| $200,000 | $45,690 | $49,400 | $3,710 |
| $500,000 | $150,690 | $153,819 | $3,129 |
| $500,000+ | $150,690 + 37% of excess |
Married taxpayers filing joint returns and surviving spouses
| Taxable Income | 2018 Tax | 2017 Tax | Dollar Reduction |
|---|---|---|---|
| $19,050 | $1,905 | $1,925 | $10 |
| $77,400 | $8,907 | $10,828 | $1,921 |
| $165,000 | $28,179 | $33,085 | $4,906 |
| $315,000 | $64,179 | $79,168 | $14,989 |
| $400,000 | $91,379 | $107,217 | $15,838 |
| $600,000 | $161,379 | $182,831 | $21,452 |
| $600,000+ | $161,379 + 37% of excess |
Below you will find a comparison of the tax rate schedule for single taxpayers plus the tax rate schedule for married taxpayers filing jointly and surviving spouses. The new tax rates are under the 2018 heading and the old are under the 2017 heading.
Tax Rate Comparison
Single Taxpayers
2018
| 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% |
2017
| Taxable Income Over | But Not Over | Is Taxed at |
|---|---|---|
| $0 | $9,325 | 10% |
| $9,325 | $37,950 | 15% |
| $37,950 | $91,900 | 25% |
| $91,900 | $191,650 | 28% |
| $191,650 | $416,700 | 33% |
| $416,700 | $418,400 | 35% |
| $418,400 | 39.6% |