McVay Business Services - Accounting & Tax Services Pensacola, FL
Final Tax Plan is out - 12/15/17
The completed version of the GOP tax bill will have seven tax brackets, sources told FOX Business on Friday.
As Republicans in the House and Senate prepared to release the details of the joint bill agreed upon by lawmakers across both chambers, sources said the GOP decided to stick with a seven-tier bracket system. The rates fall at 10%, 12%, 22%, 24%, 32%, 35% and 37%. The House had initially proposed collapsing the number of brackets into just three or four, an initiative the administration supported in an effort to simplify the tax code.
While the number of federal-income brackets remains the same, the thresholds and percentages are different. Here’s a look at the new tax brackets.
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This rate applies to:
Single individuals with income up to $9,525
Married couples filing jointly with income levels up to $19,050
This rate applies to:
Single individuals with incomes between $9,525 and $38,700
Married couples filing jointly with incomes between $19,050 and $77,400
Single individuals: $38,700 to $70,000
Married couples filing jointly: $77,400 to $165,000
Single individuals: $70,000 to $160,000
Married couples filing jointly: $165,000 to $315,000
Single individuals: $160,000 to $200,000
Married couples filing jointly: $315,000 to $400,000
Single individuals: $200,000 to $500,000
Married couples filing jointly: $400,000 to $600,000
Single individuals: $500,000 and above
Married couples filing jointly: $600,000 and above
These are the existing rates: 10%, 15%, 25%, 28%, 33%, and 39.6%. Currently, the top rate applies to those with incomes in excess of $470,700. Plans put forth by both chambers initially included people with household incomes between $600,000 and $1 million in a 35% bracket.
State and local tax deductions, otherwise known as SALT, have been a big source of controversy for Republicans throughout the tax reform debate. FOX Business confirmed on Friday that the new plan will cap state and local income and property deductions at $10,000.
Mike McVay, Tax Accountant
Mike McVay, Tax Accountant Blog
Certified QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL
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