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2018 Tax Brackets Released by IRS

2018 Tax Brackets Released by IRS

The Internal Revenue Service (IRS) building is viewed in Washington, D.C., on Feb. 19, 2014. (Jim Watson/AFP/Getty Images)

By    |   Friday, 20 October 2017 02:17 PM

The 2018 tax brackets adjusted for inflation were released by the IRS on Thursday, along with various other tax-related provisions, Forbes revealed.

The new information offers estimates and projections for a growing number of tax figures and, while the results may be altered by tax reform legislation, these numbers will help residents prepare for the 2018 tax year.

According to tax website, dontmesswithtaxes.com, 2018 still features seven tax brackets however, the GOP's draft tax reform outline could reduce this to just three brackets.

Until that happens, tax payers will be taxed a minimum of 10 percent tax and maximum of 39.6 percent.

Looking at tax bracket figures, Forbes noted that other marginal rates would be: 15 percent, 25 percent, 28 percent, 33 percent and 35 percent.

The 39.6 percent tax rate applies to individuals with income exceeding $426,700, up from $418,400. The number for married filing jointing is $480,050, up from $470,700, according to IRS news release.

Single taxpayers and married couples filing separately in 2018 can expect a standard deduction of $6,500, which is up from last year’s $6,350 in 2017, while married couples filing jointly would have a standard deduction of $13,000, which is up from the previous year’s $12,700.

Meanwhile heads of household would see a standard deduction of $9,550, which is up from $9,350.

For 2018, the personal exemption amount will be $4,150 with phase-out thresholds beginning at $266,700 ($320,000 for married couples filing jointly) and phasing out completely at $389,200 ($442,500 for married couples filing jointly).

The IRS has not waited for Capitol Hill but, with the White House and Congressional Republicans hoping to still make some final changes before the end of the year, many are wondering how this will affect their taxes for 2018.

Certified financial planner and contributor for Forbes, Liz Frazier Peck, said the tax reform plan had major hurdles to overcome first.

"A client recently asked how I thought the tax reform would affect him," she noted. "My response, "I don't think it will." At least not as is, and not in 2018."

She added that although Republicans were eager to pass the legislation before year end, "planning to pass the first overhaul to our tax system in over three decades, even with Republicans now only needing a simple majority vote in the Senate, is an extremely ambitious goal."

Peck noted that it was possible that temporary tax cuts instead of the full reform could be passed however, it was unlikely that "a tax system overhaul will be the win Republicans need for 2017."

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The 2018 tax brackets adjusted for inflation were released by the IRS on Thursday, along with various other tax-related provisions.
2018, tax, brackets, released, irs
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2017-17-20
Friday, 20 October 2017 02:17 PM
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