The New 2018 Tax Reform and You

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We know that the new tax reform has given corporations a significant—35 to 21 percent!—cut in their tax rate, leaving many wondering what the new tax reform means for how their own taxes will be impacted. Smile, because for nearly all taxpayers, the tax rates have actually gone down!

See for yourself here:

Tax Bracket for 2018 Income Range: Single Tax Filers Income Range: Married Filing Jointly
12% $12,000-$45,000 $24,000-$90,000
25% $45,001-$200,000 $90,001-$260,000
35% $200,001-$500,000 $260,001-$1 million
39.6% $500,000 and above $1 million and above

 

Here are the 2017 tax brackets:

Tax Bracket in 2017 Income Range: Single Tax Filers Income Range: Married Filing Jointly
10% $0-$9,325 $0-$18,650
15% $9,326-$37,950 $18,651-$75,900
25% $37,951-$91,900 $75,901-$153,100
28% $91,901-$191,650 $153,101-$233,350
33% $191,651-$416,700 $233,351-$416,700
35% $416,701-$418,400 $416,701-$470,700
39.6% $418,401 and above $470,701 and above

 

These newly reduced tax rates are already in effect. The average household income for the Bryan-College Station metro area was $42,233 in 2016 (latest available data from the Census), meaning many in Brazos Valley can expect to see tax cuts.

While the standard deductions changes won’t go into effect until filing taxes in 2019, the good news is that they will be almost doubled for everyone: from $6,350 to $12,000 for single filers, and $12,700 to $24,000 for joint filers.

Remember, that while all the brackets have been reduced, the brackets themselves have shifted somewhat, meaning that most, but not all, taxpayers will receive more returns. Taxpayers in a new tax bracket from this shift will see that their tax rate has increased.

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