What will your marginal income tax rate be?

<h2 style="text-align: left; color: #14a73c; font-size: 26px;">What will your marginal income tax rate be?</h2>

While the Tax Cuts and Jobs Act (TCJA) usually reduced individual tax rates for 2018 through 2025, some taxpayers might see their taxes go up due to reductions or eliminations of certain tax breaks—and, in some cases, due to their filing status. However, some might see additional tax savings due to their filing status.

Unmarried vs. married taxpayers
To further do away with the marriage “penalty,” the TCJA made changes to some of the middle tax brackets. An outcome of this is that some head of household and single filers could be put into higher tax brackets quicker than pre-TCJA. For instance, the start of the 32% bracket for singles for 2018 is $157,501, when before it was $191,651 for 2017 (though the rate was 33%). For heads of households, the start of this bracket has decreased even more significantly, from $212,501 for 2017 to $157,501 for 2018.

Married taxpayers, on the other hand, will not be put into some middle brackets until much higher income levels for 2018 through 2025. For instance, the start of the 32% bracket for joint filers for 2018 is $315,001, when instead it was $233,351 for 2017 (again, the rate was 33% then).

2018 filing and 2019 brackets
Until taxpayers file their 2018 tax returns, it will be difficult to tell precisely how specific taxpayers will be affected by TCJA changes (including changes to the brackets) because there are many variables. In the meantime, it is a good idea to start looking at 2019. The tax brackets are adjusted annually for inflation, as before the TCJA.

Below is a look at the 2019 brackets under the TCJA. For help assessing what your tax rate likely will be for 2019—and for help filing your 2018 tax return, contact us.

Single individuals
10%: $0 – $9,700
12%: $9,701 – $39,475
22%: $39,476 – $84,200
24%: $84,201 – $160,725
32%: $160,726 – $204,100
35%: $204,101 – $510,300
37%: Over $510,300

Heads of households
10%: $0 – $13,850
12%: $13,851 – $52,850
22%: $52,851 – $84,200
24%: $84,201 – $160,700
32%: $160,701 – $204,100
35%: $204,101 – $510,300
37%: Over $510,300

Married individuals filing joint returns and surviving spouses
10%: $0 – $19,400
12%: $19,401 – $78,950
22%: $78,951 – $168,400
24%: $168,401 – $321,450
32%: $321,451 – $408,200
35%: $408,201 – $612,350
37%: Over $612,350

Married individuals filing separate returns
10%: $0 – $9,700
12%: $9,701 – $39,475
22%: $39,476 – $84,200
24%: $84,201 – $160,725
32%: $160,726 – $204,100
35%: $204,101 – $306,175
37%: Over $306,175

© 2019
https://www.brscpa.com/
Ben R Shull CPA LLC provides clients with tax, transaction, and advisory services. The insights and quality services we deliver help lead our clients through the next generation of changes, and accelerate growth while reducing risk. CPA Katy, TX.