Pursuant to the new federal tax law which is commonly referred to as the Tax Cuts and Jobs Act of 2017 (hereinafter “TCJA of 2017”), the individual income tax rates have changed significantly.

For tax years beginning after December 31, 2017 and before January 1, 2026, all tax rates tables have changed for individuals, and seven new tax rates now apply for individuals as follows:

MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES:

If taxable income is: The tax is:
Not over $19,050 10% of taxable income.
Over $19,050 but not over $77,400 $1,905, plus 12% of the excess over $19,050.
Over $77,400 but not over $165,000 $8,907, plus 22% of the excess over $77,400.
Over $165,000 but not over $315,000 $28,179, plus 24% of the excess over $165,000.
Over $315,000 but not over $400,000 $64,179, plus 32% of the excess over $315,000.
Over $400,000 but not over $600,000 $91,379, plus 35% of the excess over $400,000.
Over $600,000 $161,379, plus 37% of the excess over $600,000.

 

HEADS OF HOUSEHOLDS:

If taxable income is: The tax is:
Not over $13,600 10% of taxable income.
Over $13,600 but not over $51,800 $1,360, plus 12% of the excess over $13,600.
Over $51,800 but not over $82,500 $5,944, plus 22% of the excess over $51,800.
Over $82,500 but not over $157,500 $12,698, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 $30,698, plus 32% of the excess over $157,500.
Over $200,000 but not over $500,000 $44,298, plus 35% of the excess over $200,000.
Over $500,000 $149,298, plus 37% of the excess over $500,000.

 

UNMARRIED INDIVIDUALS OTHER THAN SURVIVING SPOUSES AND HEADS OF HOUSEHOLDS:

If taxable income is: The tax is:
Not over $9,525 10% of taxable income.
Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525.
Over $38,700 but not over $82,500 $4,453.50, plus 22% of the excess over $38,700
Over $82,500 but not over $157,500 $14,089.50, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 $32,089.50, plus 32% of the excess over $157,500.
Over $200,000 but not over $500,000 $45,689.50, plus 35% of the excess over $200,000.
Over $500,000 $150,689.50, plus 37% of the excess over $500,000.

 

MARRIED INDIVIDUALS FILING SEPARATE RETURNS:

If taxable income is: The tax is:
Not over $9,525 10% of taxable income.
Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525.
Over $38,700 but not over $82,500 $4,453.50, plus 22% of the excess over $38,700.
Over $82,500 but not over $157,500 $14,089.50, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 $32,089.50, plus 32% of the excess over $157,500.
Over $200,000 but not over $300,000 $45,689.50, plus 35% of the excess over $200,000.
Over $300,000 $80,689.50, plus 37% of the excess over $300,000.

 

 

The TCJA of 2017 also changes the tax rate table for Estates and Trusts from five tax brackets to the following four tax brackets as follows:

If taxable income is: The tax is:
Not over $2,550 10% of taxable income.
Over $2,550 but not over $9,150 $255, plus 24% of the excess over $2,550.
Over $9,150 but not over $12,500 $1,839, plus 35% of the excess over $9,150.
Over $12,500 $3,011.50, plus 37% of the excess over $12,500.

 

Standard Deductions and Personal Exemptions

The TCJA of 2017 also significantly changed the standard deductions and personal exemptions allowed by individuals.

For tax years beginning after December 31, 2017 and before January 1, 2026, the standard deduction has increased to $12,000 for single tax filers, $18,000 for head of house hold, and $24,000 for joint filers. The standard deduction is adjusted for inflation from January 1, 2018 to December 31, 2025, when it is set to expire.

This increase in standard deduction will likely result in many more taxpayers electing the standard deduction instead of itemizing their deductions.

The personal exemption for individuals is eliminated from January 1, 2018 to December 31, 2025.

The personal exemption for trusts remains at $100 and $300 (depending on the provision of the trust), and the personal exemption for estates remains at $600.

Please contact us with questions or comments.

Eric J. Einhart

Eric J. Einhart
Russo Law Group, P.C.
100 Quentin Roosevelt Blvd., Suite 102
Garden City, NY 11530
800-680-1717

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