Income tax brackets will change in 2018 if President Donald Trump enacts the GOP tax legislation.
- Income tax brackets will change in 2018 if President Donald Trump enacts the GOP tax legislation.
- The Republican tax plan proposes keeping seven tax brackets, but it changes the income ranges.
- The final bill proposes eliminating the personal exemption and increasing the standard deduction.
Republican leaders appear to have enough votes needed to pass their final tax bill.
The bill, the Tax Cuts and Jobs Act, was finalized this week by a conference committee made up mostly of members of the House and Senate committees that wrote the versions that those chambers passed.
Republican leaders have said they plan to hold a vote on the compromise bill early next week, with a goal of President Donald Trump signing it by Wednesday.
In the mean time, Business Insider put together two charts showing how this new tax plan could change federal income tax brackets in 2018 compared with those in 2017.
First, for single filers:
And second, for joint filers:
Under the final version of Republican plan, there would still be seven federal income tax brackets — but at slightly lower rates and adjusted income ranges. The brackets proposed are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
About 70% of Americans claim the standard deduction when filing their taxes, and their paychecks will almost certainly increase — albeit slightly — if the tax plan is enacted.
In 2017, the standard deduction for a single taxpayer is $6,350, plus one personal exemption of $4,050.
The GOP proposal would combine those into one larger standard deduction for 2018: $12,000 for single filers and $24,000 for joint filers.