I am doing a Continuing Education Program for Financial, Insurance and Accounting Professionals on May 2, 2018. But one of the questions I am hearing is “What about families?” “How do the changes in the Tax Code impact families?”
If you are ever feeling that you are particularly bright, sharp, insightful, and need humbling, look into the United States Tax Code. It is a dizzying proposition. Here is a break down some of the New Tax Code.
The Income Tax Rates Were Modified
The Income Tax Rate is based upon what your Taxable Income is. That is your Adjusted Gross Income. There is a tax bracket on that adjusted income based upon whether you are filing as an individual, or a married couple filing a joint tax return. The new Tax Code keeps the seven (7) tax brackets, but changes the tax rates in those seven (7) brackets and the threshold of taxable money earned to move into those brackets.
You can see the tax bracket rate changes for yourself.
Previous law: These are the tax brackets that individual taxpayers use when filing taxes in 2018 for the 2017 tax year, according to the IRS.
| Single Filers | ||
| Tax Bracket | Taxable Income | |
| 10 percent | Up to $9,325 | |
| 15 percent | $9,326-$37,950 | |
| 25 percent | $37,910-$91,900 | |
| 28 percent | $91,901-$191,650 | |
| 33 percent | $191,651-$416,700 | |
| 35 percent | $416,701-$418,400 | |
| 39.6 percent | $Over $418,400 | |
| Married, Filing Jointly | ||
| Tax Bracket | Taxable Income | |
| 10 percent | Up to $18,650 | |
| 15 percent | $18,651-$75,900 | |
| 25 percent | $75,901-$153,100 | |
| 28 percent | $153,101-$233,350 | |
| 33 percent | $233,351-$416,700 | |
| 35 percent | $416,701-$470,700 | |
| 39.6 percent | Over $470,700 | |
New Law: These will be the brackets that individual taxpayers will use in 2019 for the 2018 tax year.
| Single Filers | ||
| Tax Bracket | Taxable Income | |
| 10 percent | Up to $9,525 | |
| 12 percent | $9,526-$38,700 | |
| 22 percent | $38,701-$82,500 | |
| 24 percent | $82,501-$157,500 | |
| 32 percent | $157,501-$200,00 | |
| 35 percent | $200,001-$500,000 | |
| 37 percent | Over $500,000 | |
| Married, Filing Jointly | ||
| Tax Bracket | Taxable Income | |
| 10 percent | Up to $19,050 | |
| 12 percent | $19,051-$77,400 | |
| 22 percent | $77,401-$165,000 | |
| 24 percent | $165,001-$315,000 | |
| 32 percent | $315,001-$400,000 | |
| 35 percent | $400,001-$600,000 | |
| 37 percent | Over $600,001 | |
One has to look at their Taxable Income, which is within a certain range, and apply that to the corresponding Income Tax Bracket. For many people their Income Tax Rate may go down.
There will be more to come on Families and the New Tax Code.
At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.