With the tax reform at the end of 2017, there are a number of changes to the 2018 tax law. These include new tax 2018 federal tax brackets, standard deduction changes, and elimination of the personal exemption.
To better compare the 2017 tax brackets to the new 2018 tax brackets, they are shown side by side.
2018 Federal Tax Brackets
For 2018, there is a still a 10% bracket and only a small change to the cutoff amounts for that bracket. The other brackets have all changed and now include the following: 12%, 22%, 24%, 32%, 35%, and 37%.
The table below shows the amounts for each percentage. 2017 percentages and amounts are shown in light gray text.
Overall, percentages are lower than in 2017 and the ranges for each percentage are also lower, producing tax savings for each group. For example, a married couple filing jointly and making $160,000 would have been in the 28% tax bracket for 2017. For 2018, they move down to the 22% bracket:
- 2017: $75,901 to $153,100 = 28%
- 2018: $77,400 to $165,000 = 22%
They dropped four percentage points and have a fairly significant amount of savings in taxes.
To understand which 2018 tax bracket you are in, here are a few examples:
- Single earning $100,000 = 24%
- Married filing jointly and earning $90,000 = 22%
- Single earning $190,000 = 32%
- Head of household earning $140,000 = 24%
2018 Standard and Personal Exemption Changes
The standard deduction has also changed for 2018.
From the table, you can see there are large increases from 2017 to 2018. These come at the expense of the personal exemption, which has been repealed.
Calculating Your 2018 Withholdings
If you’d like to calculate your withholdings for 2018, you can use the IRS withholding calculator found at https://apps.irs.gov/app/withholdingcalculator/.
The IRS does anticipate there will be further changes to withholdings for 2019.