The Tax Cuts and Jobs Act, which was passed by Congress over a year ago and signed into law by Trump, is one of the most significant tax changing laws that has been passed in quite a long time.
With that being said, the Tax Cuts and Jobs Act is going to affect you and your taxes (naturally).
Take a look at the brackets below to see what’s going to change:
| Former Marginal Tax Rates (2017 and Prior Years) | New Marginal Tax Rates (2018-2025 Tax Years) |
| 10% | 10% |
| 15% | 12% |
| 25% | 22% |
| 28% | 24% |
| 33% | 32% |
| 35% | 35% |
| 39.6% | 37% |
Data source: IRS.
| Marginal Tax Rate | Single | Married Filing Jointly | Head of Household | Married Filing Separately |
| 10% | $0-$9,525 | $0-$19,050 | $0-$13,600 | $0-$9,525 |
| 12% | $9,526-$38,700 | $19,051-$77,400 | $13,601-$51,800 | $9,526-$38,700 |
| 22% | $38,701-$82,500 | $77,401-$165,000 | $51,801-$82,500 | $38,701-$82,500 |
| 24% | $82,501-$157,500 | $165,001-$315,000 | $82,501-$157,500 | $82,501-$157,500 |
| 32% | $157,501-$200,000 | $315,001-$400,000 | $157,501-$200,000 | $157,501-$200,000 |
| 35% | $200,001-$500,000 | $400,001-$600,000 | $200,001-$500,000 | $200,001-$300,000 |
| 37% | Over $500,000 | Over $600,000 | Over $500,000 | Over $300,000 |
Data Source: IRS.
| Marginal Tax Rate | Single | Married Filing Jointly | Head of Household | Married Filing Separately |
| 10% | $0-$9,700 | $0-$19,400 | $0-$13,850 | $0-$9,700 |
| 12% | $9,701-$39,475 | $19,401-$78,950 | $13,851-$52,850 | $9,701-$39,475 |
| 22% | $39,476-$84,200 | $78,951-$168,400 | $52,851-$84,200 | $39,476-$84,200 |
| 24% | $84,201-$160,725 | $168,401-$321,450 | $84,201-$160,700 | $84,201-$160,725 |
| 32% | $160,726-$204,100 | $321,451-$408,200 | $160,701-$204,100 | $160,726-$204,100 |
| 35% | $204,101-$510,300 | $408,201-$612,350 | $204,101-$510,300 | $204,101-$306,175 |
| 37% | Over $510,300 | Over $612,350 | Over $510,300 | Over $306,175 |
Data Source: IRS.
The Personal Exemption Is Gone
The standard deduction has roughly doubled since this law took effect, but it doesn’t necessarily mean that you going to get double the tax break.
While the standard deduction has increased, the personal exemption has been gotten rid of.
According to MotelyFool.com:
“In plain English, a personal exemption is a certain amount of income Americans can exclude from their taxable income each year. In prior tax years, Americans could claim one personal exemption for themselves, their spouse, and one for each dependent.”
Whether you owe money to the IRS or you have a State tax debt, our staff of Enrolled Agents and Tax Professionals can help you! We have over 50 years of experience negotiating with the IRS in all 50 States.
Call The Tax Defense Group today!