IRS Tax Brackets Under the New Tax Bill
When the new tax bill was signed into law in December 2017, it seemed like it made instant headlines. Taxpayers who were used to the bracket they may have been in for years were suddenly unsure of how the following year’s worth of income was going to be taxed. Fortunately, there are now a number of certified documents from the IRS that help to explain the current situation.
Perhaps some of the biggest news was that the bracket realignment also changed the standard deduction in the process.
Standard Deduction Amounts in 2018
Individuals who file single returns will now receive a standard deduction of $12,000 while those who are married filing jointly will receive one twice that. At the same time, there won’t be personal exemptions for 2018 the same way that there were just a year ago. This confused some taxpayers, because the IRS originally provided different information for them that is now been superseded by the new tax bill. This also applies to the bracket values themselves.
Guide to the New 2018 Tax Brackets
Under the new law, people who both kinds of returns can fall into one of seven different brackets. While this might sound complex, it’s too not much different from the way things were done before even if some of the percentages have been changed around. This adjusted the withholding tables in the process. There’s also a zero rate, though anyone who is taxed at zero percent on some income still has to report that income. click here.
Individual taxpayers are looking at the following brackets:
- 10 percent for the first $9,525
- 12 percent between $9,525 & $38,700
- 22 percent between $38,700 & $82,500
- 24 percent between $82,500 & $157,500
- 32 percent between $157,500 & $200,000
- 35 percent between $200,000 & $500,000
- 37 for everything over that
If you’re married filing a joint return, then you’ll be looking at the following picture instead:
- 10 percent for the first $19,050
- 12 percent between $19,050 & $77,400
- 22 percent between $77,400 & $165,000
- 24 percent between $165,000 & $315,000
- 32 percent between $315,000 & $400,000
- 35 percent between $400,000 & $600,000
- 37 percent for everything over that
Otherwise, the methods for calculating total tax liabilities remain more or less the same in spite of these new numbers.
How to know Whether You Need to File
All individuals who have any income over the standard minimum deduction will have to file. If you’re married, then you have to file a joint return if your income plus your spouse’s income is greater than the standard deduction and you live in the same residence. Neither taxpayer may be listed as a dependent of someone else who has more than $500 worth of earned income.
Get Ready for 2018 with Professional Tax Assistance
Many taxpayers are feeling nervous and confused because of the fact that new legislation changed the way that IRS tax brackets work. Success Tax Relief has seen this many times before whenever new tax laws pass. If you’ve been feeling this way, then contact us online or give us a call at 877-825-1179 to speak with a tax relief specialist today!