What is My Tax Rate for 2018?
Wondering how the new tax law will affect your tax rate? The 2018 Tax Reform President Trump signed into law on December 22, 2017 offered significant amendments to the tax liabilities and benefits afforded to individuals.
Part of this initiative was modifications to the tax brackets and tax rates for individuals. As the tax professionals, we’ve broken down the tax rate process and changes so you’re prepared for your 2018 personal tax return.
How are Tax Rates Calculated?
Your tax rate for 2018 depends upon what tax bracket you fall under. The federal tax brackets follow a progressive income tax system, so the higher your income level, the higher your tax rate. Your tax rate applies to each additional dollar of income in your tax bracket. For instance, if you fall within the $77,401 – $165,000 tax bracket for Married Filing Jointly, your tax rate is $8,907 plus 22% of the amount over $77,400.
What tax bracket you fall into of course depends upon your taxable income. And as the 2018 Tax Reform brought new deduction and exemption rules, it’s important to meet with your tax advisor to see how it’s affected your tax situation.
What are the Tax Rate Changes for 2018?
There still remains to be 7 tax rates with the 2018 Tax Reform, although tax rates have decreased overall. The Federal income tax has 7 different tax rates that you fall into based off of income level and filing status: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Most notably, the top rate decreased 2.6% from 39.6 to 37%
The Tax Rates for 2018 are as follows:
Single
- If your taxable income is $0 – $9,525, your tax rate is 10% of taxable income
- If your taxable income is $9,526 – $38,700, your tax rate is $952.50 plus 12% of the amount over $9,525
- If your taxable income is $38,701 – $82,500, your tax rate is $4,453.50 plus 22% of the amount over $38,700
- If your taxable income is $82,501 – $157,500, your tax rate is $14,089.50 plus 24% of the amount over $82,500
- If your taxable income is $157,501 – $200,000, your tax rate is $32,089.50 plus 32% of the amount over $157,500
- If your taxable income is $200,001 – $500,000, your tax rate is $45,689.50 plus 35% of the amount over $200,000
- If your taxable income is $500,001 or more, your tax rate is $150,689.50 plus 37% of the amount over $500,000
Married Filing Jointly or Qualifying Widow(er)
- If your taxable income is $0 – $19,050, your tax rate is 10% of taxable income
- If your taxable income is $19,051 – $77,400, your tax rate is $1,905 plus 12% of the amount over $19,050
- If your taxable income is $77,401 – $165,000, your tax rate is $8,907 plus 22% of the amount over $77,400
- If your taxable income is $165,001 – $315,000, your tax rate is $28,179 plus 24% of the amount over $165,000
- If your taxable income is $315,001 – $400,000, your tax rate is $64,179 plus 32% of the amount over $315,000
- If your taxable income is $400,001 – $600,000, your tax rate is $91,379 plus 35% of the amount over $400,000
- If your taxable income is $600,001 or more, your tax rate is $161,379 plus 37% of the amount over $600,000
Married Filing Separately
- If your taxable income is $0 – $9,525, your tax rate is 10% of taxable income
- If your taxable income is $9,526 – $38,700, your tax rate is $952.50 plus 12% of the amount over $9,525
- If your taxable income is $38,701 – $82,500, your tax rate is $4,453.50 plus 22% of the amount over $38,700
- If your taxable income is $82,501 – $157,500, your tax rate is $14,089.50 plus 24% of the amount over $82,500
- If your taxable income is $157,501 – $200,000, your tax rate is $32,089.50 plus 32% of the amount over $157,500
- If your taxable income is $200,001 – $300,000, your tax rate is $45,689.50 plus 35% of the amount over $200,000
- If your taxable income is $300,001 or more, your tax rate is $80,689.50 plus 37% of the amount over $300,000
Head of Household
- If your taxable income is $0 – $13,600, your tax rate is 10% of taxable income
- If your taxable income is $13,601 – $51,800, your tax rate is $1,360 plus 12% of the amount over $13,600
- If your taxable income is $51,801 – $82,500, your tax rate is $5,944 plus 22% of the amount over $51,800
- If your taxable income is $82,501 – $157,500, your tax rate is $12,698 plus 24% of the amount over $82,500
- If your taxable income is $157,501 – $200,000, your tax rate is $30,698 plus 32% of the amount over $157,500
- If your taxable income is $200,001 – $300,000, your tax rate is $44,298 plus 35% of the amount over $200,000
- If your taxable income is $300,001 or more, your tax rate is $149,298 plus 37% of the amount over $500,000
Need Help Finding Your Tax Rate? Contact Your Tax Advisor Today!
When it comes to your taxes, it pays to have a professional looking over your work. With 40 years of experience, the Enrolled Agents at Robert Hall & Associates can help maximize your tax return by making sure you’re not missing out on any money saving opportunities.
2018 personal income tax returns are due by Monday, April 15, 2019. Don’t wait until tax season to get your tax rate questions answered!
Have questions on the new tax brackets? Call us today at (818) 242-4888 or fill out a contact form to speak with an Enrolled Agent to discuss your tax planning strategies for your 2018 tax return.
Interested in learning more about the new tax laws? Find out our top 25 facts you need to know about the 2018 Tax Reform.
Are you planning for the future? Learn what new federal regulations may impact your current and future financial goals.
