Well, they did it, the Republicans have finally passed their tax bill and they are promising big tax breaks for all. But is this true?
We know this can be confusing with all the news media rushing to get information out there and showing you the tax brackets. But here at Orca, we believe in minimalism, so we broke this down in the simplest form, we also wanted to touch on the changes that affect our readers, so let us start with some highlights.
First, none of the below will affect your 2017 taxes this will all start in 2018, but your payroll could reflect tax changes as soon as February.
• Tax Reform bill will increase our deficit by $1.46 Trillion over next decade #yolo
• Still seven tax brackets (see below if yours went up or down)
• Standard deduction is up from $6,350 to $12,000 for our tinder swiping singles and $12,700 to $24,000 for our married penguins
• But the personal exemption of $4,000 is gone
• Estate tax exemption doubled making it easier to pass through wealth without paying taxes
• Student loan interest is safe at $2,500 per a year
• The corporate tax rate is down from 35% to 21%, in hopes to bring jobs back to America #trickledownwhat
• Pass through entities like S-corps tax burden has been lowered by 20% deduction
• Tax prepare deductions are gone, so no longer can you deduct that CPA expense
• Mortgage interest rate deduction is on loans up to $750,000 instead of $1,000,000, mainly targeting high real estate states like California
• There is a $10,000 cap on state an local tax deduction so pre-paying your prop taxes may not help now, again targeting states like California
• Child tax credit has doubled to $2,000; guess it is time to have kids!
• The electric car deduction stays alive, so $7.500 credit for buying that Tesla
These are some quick highlights and an overall what is happening, again we here at Orca understand it is hard to break this down, so below instead of giving you a chart like most blogs, we have broken down if your taxes are going up or down based on how much you are making.
Working on Myself Bracket (Unmarried Individuals)
• If you make over $500,000 your taxes dropped by 2.6% (39,6 %to 37.0%)
• If you were making $418,401 to $500,000 your taxes dropped by 4.6% from (39.6% to 35%)
• If you make between $200,000 to $500,000 your tax rate raised by 2% from (33% to 35%)
• if you made $191,000-$200,000 your taxes dropped by 1% (33% to 32%)
• If you make between $157,501-$200,000 your tax rate raised by 4% (28% to 32%)
• If you made $82,500-$91,900 your taxes dropped by 1% from (25% to 24%)
• If you make between $82,501 to $157,500 your tax rate dropped by 4% (28% to 24%)
• If you make between $38,701 to $82,500 your tax rate dropped by 3% same (25% to 22%)
• If you make between $9,526 to $38,700 your tax rate dropped by 3% (15% to 12%)
• If you make between $0-$9,525 you tax rate stayed the same
Penguin Bracket (Married, filing jointly)
• If you make over $600,000 then your taxes dropped by 2.6% from (39.6% to 37%)
• If you make between $470,700-$600,000 your taxes dropped by 4.6% from (39.6 to 35%)
• If you make between $416,700-$470,700 then your taxes stayed the same from (35% to 35%)
• If you make between $400,000-$416,700 then your taxes raised by 2% from (33% to 35%)
• If you make between $315,000 to $400,000 then your taxes dropped by 1% (33% to 32%)
• If you make between $233,300 to $315,000 then your taxes dropped by 9% form (33% to 24%)
• If you make between $165,000 to $233,000 then your taxes dropped by 4% (28% to 24%)
• If you make between $153,000 to $165,000 then your taxes dropped by 6% (28% to 22%)
• If you make between $77,000 to $153,000 then your taxes dropped by 3% (28% to 25%)
• If you make between $19,000 to $77,000 then your taxes dropped by 3% (15% to 12%)
• If you make between $0 to $19,050 then your taxes stayed the same at 10%
Overall, the brackets stay as confusing as they were before but there are major cuts for certain married couples and a few of the single filers, but it does not follow what the Republicans are pushing out, claiming it is a tax cut for all, some taxes are going up due to the new plan, it all just depends on where you fall.
Orca will be staying up to date on this information and posting more tax articles, please subscribe below to stay up to date with our information and like us on facebook here.