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US Federal  Income Tax Rates & Brackets for 2018
US US Federal  Income tax brackets and marginal tax rates for the  2018 tax year under the GOP's new tax plan
Uncle Sam says Pay Your Taxes

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December 22, 2017
The tables below shows US Federal  Income tax brackets and marginal tax rates for the  2018 tax year under the GOP's new tax plan signed into law today by President Trump.

Democrats ask "Will Lucy let Charlie Brown kick the football (see image below) with this new plan?"

Corporate Tax Rate:
  • 2017: 35%

  • 2018: 21%
Corporate Alternative Minimum Tax
  • 2017: 20%.  Companies must calculate their ordinary tax and AMT tax, and pay whichever is higher.

  • 2018:  None
Equipment Expensing:  Currently businesses must depreciate capital equipment over the life of the equipment.  The new law allows immediate deduction of the cost of certain equipment in the year purchased after Sept. 27, 2017 and before Jan. 1, 2023. After that, the percentage of cost that could be immediately deducted would gradually phase down.

US Federal Individual tax rates for tax year 2017 vs. 2018

Income Tax RateIncome Levels for Those Filing As:
Under GOP
Tax Bill
Copyright © 
Full Article at
25%22%$38,700-$82,500 $77,400-$165,000
33% to 35%35%$200,000-$500,000$400,000-$600,000

Standard Deductions. For 2017, the standard deduction is $6,350. An additional $1,550 is allowed for an unmarried individual (single or head of household) who is 65 or older or blind, $3,100 if 65 or older and blind.

The personal exemption for tax year 2017 is $4,050.  However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly.)

Note: Each tax rate applies to a range of income called a tax bracket. Each tax rate applies to a specific range of taxable income. Taxable income is total income after various deductions have been subtracted.

For 2018, the GOP/Trump tax plan: (not a single Democrat voted for it):

  • Standard Deduction: Raises the Standard Deduction to $12,000 for single filers and $24,000 for joint filers. It reverts back to the current level in 2026.

  • Personal Exemption: Eliminates personal exemptions currently worth $4,150 per adult and child covered by your tax return.

  • SALT: Caps deductions for State and Local Taxes (SALT) at $10,000

  • Medical expenses: Allows deductions for Medical expenses that exceed 7.5% of income.  In 2017 this was 10% of income.

  • Child Tax CreditIncreases the Child Tax Credit from $1,000 per child to $2,000.

  • Mortgage Interest:  For New Mortgages only:  Decreased the cap on deduction amount allowed for mortgage interest from $1,000,000 to $750,000.  Current mortgages grandfathered at $1,000,000.

  • Estate Tax: Raises the limit on the size of an estate exempt from the "Inheritance Tax" from $10.9M to $22.4M ($10,900,000 to $22,400,000). The exemption reverts to current levels in 2026.

  • AMT: Keeps the Alternative Minimum Tax. It increases the exemption from $54,300 to $70,300 for singles and from $84,500 to $109,400 for joint. The exemptions phase out at $500,000 for singles and $1 million for joint. The exemption reverts to current levels in 2026. 

  • ACA:  Eliminates the "Obamacare" Affordable Care Act mandate that everyone buy health insurance.

  • Child Tax Credit:  Increases the Child Tax Credit from $1,000 to $2,000. Credit is refundable up to $1,400. It increases the income level from $110,000 to $400,000 for married tax filers. 

  • Credit for Elderly Parents or disabled adult children: Allows a $500 credit for each non-child dependent. The credit helps families caring for elderly parents.

  • Pass-Through Deduction
    • Currently Pass-through businesses, which include partnerships, limited liability companies, S corporations and sole proprietorships, pass their income to their owners, who then pay taxs at their individual rates. 
    • The new law gives a 20% deduction on business income up to $315,000 for married couples and $157,500 for individuals.  Hmmm... this might make it worth working harder to become a pass-through & get more newsletter subscribers!   Subscribe now and give me a head start!
Peanuts: Lucy's Tax Cut Football Promise
Peanuts Lucy Tax Cut Football Promise

Note 1.  Source:  Bloomberg: A Quick Guide to the GOP Tax Plan  Full Article at

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