FOR INDIVIDUAL FILERS
This sham of a tax bill a taxed individual filers people who file individually and couples have to watch closely the changes that will happen for 2018 if you look closely the married couples with children may have no effect in their taxes may even go up because of the removal of the personal exemption take a look at the attached the tax schedules rates for individuals as they were and as they will be after the tax changes
- Some rates are lower for individuals: The bill preserves seven tax brackets, but changes the rates that apply to: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Today’s rates are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.
Here’s how much income would apply to the new rates:
— 10% (income up to $9,525 for individuals; up to $19,050 for married couples filing jointly)
— 12% (over $9,525 to $38,700; over $19,050 to $77,400 for couples)
— 22% (over $38,700 to $82,500; over $77,400 to $165,000 for couples)
— 24% (over $82,500 to $157,500; over $165,000 to $315,000 for couples)
— 32% (over $157,500 to $200,000; over $315,000 to $400,000 for couples)
— 35% (over $200,000 to $500,000; over $400,000 to $600,000 for couples)
— 37% (over $500,000; over $600,000 for couples)
This tax bill nearly doubles the standard deduction: For single filers, the bill increases the standard deduction to $12,000 from $6,350 currently; for married couples filing jointly the standard deduction increases to $24,000 from $12,700.
This is a super change, positive for all who are single and married, everyone if the standard deduction was used last year! This is because the tax bill has increased the standard deduction, everyone will enter the schedule above at a lower rate if they used the standard deduction (and their potential itemized deductions are the same as the previous year).
With the increase in the standard deduction, itemized filers will not experience the same effect. The net effect is the percentage of filers who choose to itemize their deductions would drop sharply, since the only reason to do so is if your deductions exceed your standard deduction.
The real trouble with the tax bill is and the elimination of the personal exemption. The personal exemption is $4,050 for each person on the return this year, but will be eliminated with the 2018 tax law. That’s where the trouble starts. Imagine you have 4 Kids and your married – that elimination of the personal exemption could mean more than a $24,000 increase in your taxable income given the same facts as 2017. Whether itemizing or using the standard deduction, the same effect. This increases the amount of tax that you may owe because when you enter the above schedule,
Due to the late passage of the bill and its secrecy no one can tell you exactly whether you will have a decrease or increase until you look at your individual taxes filing for 2017 and get an estimate for 2018. Please file your taxes soon for 2017; please be concerned about your 2018 tax bill while you can still do something about it in the next 12 months.
Yes the elimination of your personal exemptions may be a serious concern of this tax bill. Doing so lowers your taxable income and thus your tax burden. The GOP tax plan eliminates that benefit. The families with three or more kids, this could reduce, if not eliminate any tax relief they might get as a result of other provisions in the bill.