The New 2018 Income Tax Brackets & Rates
Author’s note: In early March 2018, the IRS released the official 2018 Income Tax Brackets, standard deductions also another amount, including credits & phaseouts.
It seems the GOP has settled on a final tax bill. Although it ain’t over till it is over, we are close enough that an article on the new 2018 Federal Income Tax Brackets rates looks to make sense.
Representing a major tax-overhaul, the bill causes significant reforms to the federal income tax deductions & brackets. Take a look at both, beginning with the 2018 income tax brackets.
There are seven brackets and it’s the same as before. Rates overall, however, have gone down. For individuals, these lower rates are listed to expire in 2025 unless Congress extends them.
The top rate will down from 39.6% to 37%. The bottom rate still at 10%, but compared to the old brackets, it covers twice the amount of income.
2018 Standard Deduction & Exemptions
These new tax rules also cause big changes to the standard exemptions and deductions. In 2018 the standard deduction base on the law currently exists is $13,000 for a couple filing jointly. These numbers will go up to $24,000. For single filers, it goes up from $6,500 to $12,000.
The bad news is, the individual exemption, which is currently at $4,150 for 2018, would be revoked. But there is also good news for the child tax credit gets a more boost.
It currently sits at $1,000 & starts to phase out at $110,000 in income for couples also $75,000 in income for everyone else. Under the new law, the credit will be doubled to $2,000, $1,400 of which is a refundable tax credit. Moreover, it does not start to phase out till $400,000 in income for families also $200,000 for wifeless.
2018 Itemized Deductions
Certain key changes are issuing for itemized deductions. State also local taxes can still be detailed, but they’re now limited at $10,000. This leeway attempts to address the hassle from states that collect big taxes on their residents.
Interest on mortgages for primary also secondary houses is still deductible. The limit, however, has reduced from loans up to $1 million to loans up to $750,000.
In 2017 & 2018, medical expenses are deductible to the extent that exceed 7.5% of income (down from 10%).
Preparing Your Tax Returns
This end-of-year change to the 2018 tax brackets should not influence 2017 returns. You can discover a comparison of the best tax prep applications here.