On October 19th the IRS released the income tax brackets adjustments for tax year 2018 in Revenue Procedure 2017-58. Congress is expected to consider a tax reform bill which may end up altering both tax rates and income brackets but it is unclear when any changes would take place and what the changes would be. The brackets below are currently scheduled to go into effect on January 1, 2018.
Single Filing Individual Return (other than surviving spouses and heads of households)
| Tax Rate | 2017 Taxable Income | 2018 Taxable Income |
|---|---|---|
| 10% | $0 – $9,325 | $0 – $9,525 |
| 15% | $9,326 – $37,950 | $9,526 – $37,700 |
| 25% | $37,951 – $91,900 | $37,701 – $93,700 |
| 28% | $91,901 – $191,650 | $93,701 – $195,450 |
| 33% | $191,651 – $416,700 | $195,451 – $424,950 |
| 35% | $416,701 – $418,400 | $424,951 – $426,700 |
| 39.6% | $418,400+ | $426,700+ |
Married Filing Jointly (and surviving spouse)
| Tax Rate | 2017 Taxable Income | 2018 Taxable Income |
|---|---|---|
| 10% | $0 - $18,650 | $0 – $19,050 |
| 15% | $18,651 – $75,900 | $19,051 – $77,400 |
| 25% | $75,901 – $153,100 | $77,401 – $156,150 |
| 28% | $153,101 – $233,350 | $156,151 – $237,950 |
| 33% | $233,351 – $416,700 | $237,951 – $424,950 |
| 35% | $416,701 – $470,700 | $424,951 – $480,050 |
| 39.6% | $470,700+ | $480,050+ |
Married Filing Separate Returns
| Tax Rate | 2017 Taxable Income | 2018 Taxable Income |
|---|---|---|
| 10% | $0 – $9,325 | $0 – $9,525 |
| 15% | $9,326 – $37,950 | $9,525 – $38,700 |
| 25% | $37,951 – $76,550 | $38,701 – $78,075 |
| 28% | $76,551 – $116,675 | $78,075 – $118,975 |
| 33% | $116,676 – $208,350 | $118,976 – $212,475 |
| 35% | $208,351 – $235,350 | $212,476 – $240,025 |
| 39.6% | $235,350+ | $240,025+ |
Heads of Households
| Tax Rate | 2017 Taxable Income | 2018 Taxable Income |
|---|---|---|
| 10% | $0 – $13,350 | $0 – $13,600 |
| 15% | $13,351 – $50,800 | $13,601 – $51,850 |
| 25% | $50,801 – $131,200 | $51,851 – $133,850 |
| 28% | $131,201 – $212,500 | $133,851 – $216,700 |
| 33% | $212,501 – $416,700 | $216,701 – $424,950 |
| 35% | $416,701 – $444,550 | $424,951 – $453,350 |
| 39.6% | $444,550+ | $453,350+ |
The Revenue Procedure 2017-58 also released other changes, including:
- Raising the personal exemption from $4,050 to $4,150.
- Increasing the standard deduction for single taxpayers and married taxpayers filing separately from $6,350 to $6,500.
- Changing the standard deduction for married taxpayers filing jointly from $12,700 to $13,000.
- Altering the standard deduction for heads of household from $9,350 to $9,550.
Contact one of our tax advisors with questions regarding how this change might affect you and/or your employees.