Reduced Income Tax Rates

I’ve heard that the average length of time to pass a bill in the US government is 263 days.  The more technical and complicated the law, the longer they normally take. That seems reasonable.  The Tax Cuts and Jobs Act of 2017 is one of those very complicated and lengthy bills that most reasonable people would think would take a little extra time to pass.  That being said, the bill was first introduced on November 2nd and the President signed it into law on December 22nd, a whopping 51 days.  As you can imagine, it’s chock full of errors and vague language that could be interpreted many ways.  It will be some time before we get any real guidance or technical corrections so, for now, we must plan based on our best interpretation of the lawmakers’ intent and try to squeeze it all onto a “postcard.” 

 

Reduced Income Tax Rates

This is a big one that will affect just about everyone, so we will start here.  Individual income tax rates have gone down.  Not only have they gone down, but the income level where each new bracket starts has been increased.  The chart below compares the 2018 rates to 2017:

 

Tax Year 2018

 

Tax Year 2017

Tax

Rate

Single

Married Filing Jointly

 

Tax

Rate

Single

Married Filing Jointly

 

 

 

 

 

 

 

10%

Up to $9,525

Up to $19,050

 

10%

$0 – $9,325

$0 - $18,650

12%

$9,526 to

$38,700

$19,051 to

$77,400

 

15%

$9,326 to

$37,950

$18,651 to

$75,900

22%

$38,701 to

$82,500

$77,401 to

$165,000

 

25%

$37,951 to

$91,900

$75,901 to

$153,100

24%

$82,501 to

$157,500

$165,001 to

$315,000

 

28%

$91,901 to

$191,650

$153,101 to

$233,350

32%

$157,501 to

$200,000

$315,001 to

$400,000

 

33%

$190,651 to

$416,700

$233,351 to

$416,700

35%

$200,001 to

$500,000

$400,001 to

$600,000

 

35%

$416,701 to

$418,400

$416,701 to

$470,700

37%

$500,000+

$600,000+

 

39.60%

$418,400+

$470,700+

 

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