According to Heritage Foundation, here are what the new tax bill brackets for both married filers and single filers. The new tax bill brackets haven't been updated in programs like BNA Tax Planner on Iphone as of yet, so it's hard to get real examples of the new tax bill brackets in action.
Tax Brackets Before and After the New Tax BillIf you're comapring the new tax plan brackets vs old, you'll see that the tax rate within each bracket was lowered significantly, and they've also changed the income requirements for each tax bracket.The Tax Cut and Jobs Act was the first major tax overhaul in over 31 years, and it's going to impact people at every single tax bracket, which is why so many people want to know what their new tax bracket is going to be.This has left most peopleHere are highlights from the Tax Bill as called out on their website:
The new tax cuts and jobs act has been passed by the GOP and is now law in America.
I’ve met lots of small business owners that, when asked, tell me that they’re really curious about what kind of changes they’re going to have because of this new tax law which has been passed by the GOP senators in 2017/2018, and then signed into law by President Donald Trump.
from the Tax FoundationHow does Trump’s new tax law impact small businesses? Well there are two major things that my clients and entrepreneurs need to know about, and it’s all about this pass through deduction, as well as the elimination of entertainment expenses.How are small businesses impacted by the new tax law? It’s so difficult to find actual experts explaining to small business owners what the new law is going to do for them. In fact, as I was researching to try to explain this new change to small business owners, google was doing some funny Stuff and serving up articles from websites that have no business providing advice on taxes. Don’t read any more of the blog - go watch the 7 minute Youtube video about New Tax Bill and Small Businesses. If you’re an entrepreneur, or a small business owner, this video is meant to show you two major changes that are going to occur because of the new tax bill.Pass-through entities such as S corps and LLCs are going to benefit from a new 20% deduction from their business income. This is going to help people with their state and federal income taxes on their business income.There is a phase out for the business income deduction, so it’s important for people to understand that at approximately $156,000 in income, a married filing joint Lee tax return will not receive this additional deduction.The Tax Policy Institute Discusses the Phase out here:
The second major deduction has to do with entertainment expenses and how that impacts small businesses now but it’s no longer something that you can write off.The new GOP tax bill got rid of businesses ability to write off entertainment, even though it was only 50% deductible when it was a bona-fide part of conducting business. I'm really nervous that business owners will conduct themselves as usual, and then have an ugly surprise at the end of 2018 when they learn that their entertainment activities such as Golf and or sporting events, aren't deductible as they have been in the past.
The new tax bill has left many people wondering what the new tax plan brackets are, and how their tax brackets, and tax rates, will change in 2018. If you're wondering what the new tax plan brackets vs old are, then we'd love to help you understand, and as soon as BNA tax planning software has the new estimator out, we will share some real-life examples. It's been difficult to find a Trump tax plan chart with the new tax bill brackets so that people can learn what their new tax brackets will be for 2018 and beyond, because this subject is highly politicized.Here at Feedbackwrench, we care that people pay their fair share in taxes, but not a penny more. Why do we end up writing so much things like the new tax plan brackets and the pass through deduction law? Because we believe that small businesses are one of the most important peices of our economy.According to Fortune Magazine, here are the new tax plan brackets.
The Tax Cut and Jobs Act had so many iterations in it's build up, and it was so hyper-politicized, that it's been difficult to sort through the Google Search Engine Results to find the most updated and finalized tax brackets in this new GOP tax bill.What's been incredibly difficult, is that all the search engines keep serving up outdated articles. When did the president sign and pass the new Tax Cuts and Jobs Act (TCJA)? According to KPMG, it was signed into law on December 22, 2017.The problem is, most of the results being served up are showing outdated results:
With all the nonsense out there, we want to provide a very easy breakdown of the new tax brackets, before and after the GOP's tax bill. The Tac Cuts and Jobs Act is also called the "TCJA," and it means that every single taxpayer in the country is going to have lower tax brackets, although that doesn't mean everyone's overall tax bill will go down, since the bill took measures to put an end to subsidizing high-tax states by controlling the SALT deductionsWhat is a SALT deduction? Well, prior to the new tax bill, the Tax Cuts and Jobs Act, people were allowed to deduct their state income taxes from their federal taxes.SALT allowed states to tax people at high rates, knowing that people wouldn't really care since it actually meant an overall reduction in federal taxes they'd have to pay. This caused many high state taxes such as California, New York, and others to numb the harmful effect taxes had on their citizens.SALT deductions traded state income tax for their federal.This means that people living in high tax states will lose the ability to deduct their state income taxes (and property taxes), and will probably ask their state legislatures to help them out by lowering their burden.
This means that blue states are going to be facing some stressful situations, now that their high taxing mantra will impact their citizens quite a bit more.