New year, new tax bracket?

January, 01 2018 by Selena Quintanilla, CTEC
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!

Want peace of mind?

Learn About Prepaid Audit Defense

 
Selena Quintanilla, CTEC

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! 
 

Recent Articles

The IRS may determine your business is a hobby, limiting what you can deduct as expenses. This is particularly true if the activity consistently loses money.
Yes, car insurance can be tax deductible for self-employed taxpayers, Armed Forces reservists, qualified performing artists, and some government officials.
PMI, funding fees, and guarantee fees can be deductible if you qualify. One qualification is your mortgage loan must have been taken out between 2007 and 2021.
A tax lien occurs when the IRS makes a legal claim to your property to settle a tax debt. There are options if you can't pay the total amount or disagree.
This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.