Tax Cuts and Jobs Act: Updated Tax Brackets and Other

This article organizes the original guidance on tax cuts and jobs act: updated tax brackets and other impacts into clear sections for easier reading and reference.

Overview

This opening section presents the main context from the original post.

The passage of the Tax Cuts and Jobs Act in late 2017 set into motion sweeping changes to the tax code. As information came out regarding changes to the federal tax brackets, standard deduction, and personal exemptions, many people wondered, “How does this affect me?”

The elimination of personal exemptions is one of the major changes under the new tax legislation. Under the old tax law, in 2017, an exemption of $4,050 could be taken for the taxpayer, spouse, and each dependent but was limited for certain taxpayers with higher incomes.

For example, a married couple filing jointly with three dependents could potentially have total personal exemptions of $20,250 (5 x $4,050). The personal exemption amount reduced taxable income, ultimately reducing the amount of taxes owed.

Under the new tax law, personal exemptions have been eliminated.

However, to compensate for the elimination of personal exemptions, the standard deduction drastically increased under the new law. In 2017, the standard deduction was $6,350 if for those filing as single or married filing separately, $12,700 if married filing jointly, and $9,350 if filing as head of household.

The new legislation increases the standard deduction to $12,000 for single taxpayers and taxpayers married filing separately, $24,000 for married couples filing jointly, and $18,000 head of household individuals.

However, the new tax law also eliminated or established caps on certain itemized deductions. For example, the amount of state and local taxes, including income and property taxes, that can be deducted as an itemized deduction is now limited to $10,000.

Because of the higher standard deduction and this limitation, many taxpayers may now find it more advantageous to take the standard deduction rather than itemize.

After factoring in the changes to personal exemptions and the standard deduction, you may find yourself in a new tax bracket. Under the new law, there are still seven tax brackets for individuals; however, the tax rates that apply to certain brackets have decreased, per the charts below.

The taxable income range for each bracket has also changed, resulting in many taxpayers being placed in a lower tax bracket under the new law, even if their income has not significantly changed. The tables below show the income ranges under both the old and new brackets, as well as the corresponding tax rates.

Single – Old Brackets

This section keeps the original guidance focused on single – old brackets.

• Taxable Income — Tax Rate
• $0 – $9,325 — 10%
• $9,326 – $37,950 — 15%
• $37,951 – $91,900 — 25%
• $91,901 – $191,650 — 28%
• $191,651 – $416,700 — 33%
• $416-701 – $418,400 — 35%
• $ 418,401 or more — 39.6%

Single – New Brackets

This section keeps the original guidance focused on single – new brackets.

• Taxable Income — Tax Rate
• $0 – $9,525 — 10%
• $9,526 – $38,700 — 12%
• $38,701 – $82,500 — 22%
• $82,501 – $157,500 — 24%
• $157,501 – $200,000 — 32%
• $200,001 – $500,000 — 35%
• $500,001 or more — 37%

Married Filing Jointly – Old Brackets

This section keeps the original guidance focused on married filing jointly – old brackets.

• Taxable Income — Tax Rate
• $0 – $18,650 — 10%
• $18,651 – $75,900 — 15%
• $75,901 – $153,100 — 25%
• $153,101 – $233,350 — 28%
• $233,351 – $416,700 — 33%
• $416,701 – $470,700 — 35%
• $470,701 or more — 39.6%

Married Filing Jointly – New Brackets

This section keeps the original guidance focused on married filing jointly – new brackets.

• Taxable Income — Tax Rate
• $0 – $19,050 — 10%
• $19,051 – $77,400 — 12%
• $77,401 – $165,000 — 22%
• $165,001 – $315,000 — 24%
• $315,001 – $400,000 — 32%
• $400,001 – $600,000 — 35%
• $600,000 or more — 37%

Married Filing Separately – Old Brackets

This section keeps the original guidance focused on married filing separately – old brackets.

• Taxable Income — Tax Rate
• $0 – $9,325 — 10%
• $9,326 – $37,950 — 15%
• $37,951 – $76,550 — 25%
• $76,551 – $116,675 — 28%
• $116,676 – $208,350 — 33%
• $208,351 – $235,350 — 35%
• $235,351 or more — 39.6%

Married Filing Separately – New Brackets

This section keeps the original guidance focused on married filing separately – new brackets.

• Taxable Income — Tax Rate
• $0 – $9,525 — 10%
• $9,526 – $38,700 — 12%
• $38,701 – $82,500 — 22%
• $82,501 – $157,500 — 24%
• $157,501 – $200,000 — 32%
• $200,001 – $300,000 — 35%
• $300,001 or more — 37%

Head of Household – Old Brackets

This section keeps the original guidance focused on head of household – old brackets.

• Taxable Income — Tax Rate
• $0 – $13,350 — 10%
• $13,351 – $50,800 — 15%
• $50,801 – $131,200 — 25%
• $131,201 – $212,500 — 28%
• $212,501 – $416,700 — 33%
• $416,701 – $444,550 — 35%
• $444,551 or more — 39.6%

Head of Household – New Brackets

This section keeps the original guidance focused on head of household – new brackets.

• Taxable Income — Tax Rate
• $0 – $13,600 — 10%
• $13,601 – $51,800 — 12%
• $51,801 – $82,500 — 22%
• $82,501 – $157,500 — 24%
• $157,501 – $200,000 — 32%
• $200,001 – $500,000 — 35%
• $500,001 or more — 37%

If you have questions or would like to discuss how these changes will affect you, please reach out to us to set up an appointment.

By Kimberly Miller

Related Resources

These resources connect the article topic with related Bowers service pages and approved professional reading.

• Tax Services
• Bowers Updates
• About Bowers
• Client Accounting & Advisory Services
• Harvard Business Review
• Accounting Today

FAQ

The questions below summarize the main points already covered in the article.

What is the main focus of Tax Cuts and Jobs Act: Updated Tax Brackets and Other Impacts?

The article focuses on tax cuts and jobs act: updated tax brackets and other impacts and organizes the original guidance into sections for easier review.

What topics does the article cover first?

The article begins with single – old brackets and then continues through the remaining points in the original post.

Which additional areas are included?

Additional sections include single – new brackets, married filing jointly – old brackets, married filing jointly – new brackets.

Does the post include action items or reminders?

Yes. The original post includes listed items that have been kept in list format for easier scanning.

Was the original post wording changed?

The revision keeps the author wording and updates the structure so the post is easier to read online.