2018 is the year that the new tax law, imposed my President Donald Trump in December 2017, is now in affect. We’ve all had a year to prepare for the changes, however many still don’t know exactly how the 2018 Tax Reform will affect them for their 2019 tax season. The new tax law is keeping the 7 tax brackets but has increased the salary ranges. The standard deduction has been increased, while personal exemptions have also been eliminated. Depending on how much you earned in 2018 and whether you’re single or married will depend on how the new tax bracket change will affect you.
Single Filer Tax Bracket
Joint Filer Tax Bracket
From the tables above you can see that there are still 7 tax brackets that everyone will fall under, but the rate at which you will be taxed is slightly lower and the income ranges have been adjusted.
When filing their taxes in 2017, about 70% of Americans claimed the standard deduction which increased their paychecks. The standard deduction for 2017 for a single taxpayer was $6,350 plus one personal exemption of $4,050. The new tax law has eliminated the personal exemption, but has taken the average deduction and personal exemption from 2017 and combined them into one larger sum.
Tax Reform & Deductions
Aside from the new tax law affecting the existing tax bracket, it is also affecting itemized deductions. The list of itemized deductions that have been eliminated in 2018 are listed below.
- Moving expenses with the exception of military members
- Those paying alimony can no longer deduct it, while those receiving alimony can deduct it
- Unlimited state & local tax deductions
- A $1 million mortgage interest deduction
- Employee expenses that haven’t been reimbursed
Click Here to see a list of current deductions that you’re still able to claim that you might not have known existed.
By Paige Knight