Your Guide to the New 2018 Tax Brackets

The tax code underwent some major changes recently. The flurry of House and Senate activity at the end of 2017 produced the Tax Cuts and Jobs Act, which President Trump signed into law in late December. While the big topic of conversation among business owners was the hefty corporate tax cut, there have been changes for individuals as well. We break down the shifting income brackets in this article.
 
 

What’s Staying the Same and What’s Changing

 
 
There are still seven tax brackets, but the rates and the income levels they encompass are changing.  Before the new law took effect, the brackets were 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and 39.6 percent. The Tax Cuts and Jobs Act made a few changes, and the new rates are 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. This represents a decrease for all but two brackets. Not sure which income bracket you fall into? We’ve got you covered:
 
 

I’m Single

 
 
10%      $0 – $9,525
12%      $9,526 – $38,700
22%      $38,701 – $82,500
24%      $82,501 – $157,500
32%      $157,501 – $200,000
35%      $200,001 – $500,000
37%      More than $500,000
 
 

I’m the Head of the Household

 
 
10%      $0 – $13,600
12%      $13,601 – $51,800
22%      $51,801 – $82,500
24%      $82,501 – $157,500
32%      $157,501 – $200,000
35%      $200,001 – $500,000
37%      More than $500,000
 
 

I’m Married, and We File Jointly

 
 
10%      $0 – $19,050
12%      $19,051 – $77,400
22%      $77,401 – $$165,000
24%      $165,001 – $315,000
32%      $315,001 – $400,000
35%      $400,001 – $600,000
37%      More than $600,000
 
 

OK, So What?

 
 
Overall, this is good news for most people. In addition to lower tax rates for five out of the seven brackets, the new income structure means that many people will fall into a lower bracket than they did previously. It will be interesting to see what kind of impact these cuts have on investing, consumer spending, and the economy as a whole as the year progresses.
 
 

What About My Business?

 
 
Changes to the tax code will affect your business, too. You can read about that here. And, if you’re looking for a new credit card processor this year, try out 360 Payments. Give us a call or drop us a line on our website – we’d love to show you how we’re different from the rest.
 
 
PS – Check out our top ten blog posts of 2017.
 
 
PPS – Keep an eye out for these four fintech trends in 2018.
 

 

By | 2018-01-08T09:01:27+00:00 January 9th, 2018|Company News|0 Comments

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