The new bill keeps the same number of tax brackets, but it does work to reduce most of them. Widening the bracket is the theme of many of the lower tax brackets, which creates lower tax amounts for all those and higher levels. Bracket expansion in the lower end of the 32% and 35% brackets seem to be the sole levels affected by the rates.
The largest step up in the rates occurs between the 12% and 22% brackets, almost doubling the lower bracket’s rate. The lowest two tax brackets use income ranges that are almost identical to the current-law brackets, just with a lower tax rate in that second bracket at 12%. Since the median American household is currently in the 15% tax bracket, this is totally expected to achieve the sponsors desired result of lower taxes for middle-income households. The marriage penalty has been eliminated except for the highest brackets.
Here is a table of the brackets:
Do you need your tax returns evaluated for the new tax year? Czarnowski & Beer is currently offering a complimentary, no-obligation tax return evaluation. To take advantage of this limited time offer, visit our tax return offer page or contact us at firstname.lastname@example.org or call (212) 397-2970 and we will be happy to help you and answer your questions.