The most powerful piece of tax reform legislation has been passed by Congress in more than 30 years. The bill will affect the taxes of a large majority of  taxpayers, but one thing to consider is that for the majority of people, the bill won’t affect your taxes for 2017, only the ones filed in 2018. These changes are due to the Tax Jobs and Cuts Act of 2017, signed into law by President Trump on December 22, 2017. These are the numbers for the tax year 2018 beginning January 1, 2018.

Lower Tax Rates and Changed Income Ranges

The BIG news is the tax brackets and tax rates for 2018. There are still seven (7) tax rates. but lowers a number of the tax rates. It also changes the income thresholds at which the rates apply.

  • The current brackets are: 10%, 15%, 25%, 28%, 33%, 35% and 39.6%
  • The new brackets will be: 10%, 12%, 22%, 24%, 32%, 35% and 37%

The income thresholds at which these brackets kick in have changed, as well.