New year, new tax bracket?

January 01, 2018 by Selena Quintanilla
Tax Bracket

In December, Congress passed the most significant - and perhaps the most confusing - tax bill we've seen in over three decades, earning a stamp of approval from the President just in time for tax season. Though the new plan will not affect the filing of our 2017 taxes, it does introduce some significant game changers going forward.

One noticeable change is the elimination of personal and dependent exemptions. Initially, the exemption amount was thought to increase from the current $4,050 to $4,150 in 2018, making its eradication both unexpected and a bit disappointing. On the other hand, the Child Tax Credit rose from $1,000 to $2,000 per child, bumping the refundable portion of the credit up from $1,100 to $1,400.

The new bill also lowers some current tax rates, which changes the income thresholds at which the rates apply. Below is a comparison chart outlining the differences between existing brackets and thresholds compared against the new brackets and thresholds.

2017 Tax Brackets
2018 Tax Brackets
For more information on tax law changes feel free to visit the IRS.gov, or check in monthly as we tackle all things tax!

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Selena Quintanilla, CTEC
Communications Associate

 

Selena Quintanilla is a Communications Associate at TaxAudit, and a California Tax Education Council (CTEC) registered tax professional. She is now on a mission to bring clarity and comprehensibility to a topic that keeps us all up at night at least once a year-TAXES! Please, send coffee! 


 

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