Trump Tax Brackets – This Is How They Impact Your Taxes
Starting last year, Republican politicians in the House of Representatives and Senate have taken steps to alter the federal income tax brackets. The House voted to pass the act on November 2017 and President Donald Trump signed these tax reforms into law a few days before Christmas 2017. These Trump tax brackets will have a significant impact on the taxpaying public. Due to take effect in 2018, the new tax law will have an effect on almost all taxpayers. Because of the tweaks on standard deductions and tax brackets, a significant percentage of Americans will certainly see an increased pay check. If you are a legitimate tax-paying American, the amount you will be paying in taxes will depend largely on several factors, foremost of which is your civil status, whether you are a single or married individual and how much you’re earning.
What is the Tax Cuts and Jobs Act?
Also known as Trump tax brackets, the bill was introduced in the U.S. Congress by Representative Kevin Brady of Texas through the House Ways and Means Committee. The Republicans in the Senate voted to pass the tax legislation on December 2, 2017. Its official title is the mouthful “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.” The bill was signed into law by President Trump on December 22, 2017. It became Public Law number 115-97.
Why was this act introduced?
Rep. Kevin Brady of the 8th District of Texas is a Conservative Republican, and when he introduced this bill way back in November 2017, he was backed up by Congressional Republicans who see the new tax plan as a wage-boosting and job-creating endeavor to benefit the middle class. Another reason why this was passed was because it meant to simplify the Federal tax system.
Trump tax brackets promises that the take-home pay of Americans working in various occupations will increase when this reform plan is implemented. However, the increase in take-home pay is not significantly high as expected, and it would all depend on how much you currently earn.
Trump Tax Brackets: Where do you stand?
The new tax law will mean major changes for American taxpayers. It retains the seven income tax brackets, but it modifies the ranges. The standard deduction has increased and personal exemptions have been eliminated for all taxpayers, whether you are single or married.
Expert career website zippia.com broke down how the new tax reform will affect several occupations, with the assumption that the taxpayer is single, childless, a homeowner whose home is priced at three times the salary that they are receiving.
Here is a table that lists down some select occupations and how Trump tax brackets will affect their take-home pay:
|Occupation||Average Annual Salary||Current Tax||New Tax||Rate of Tax Cut|
|Librarians||$59, 870||$7, 126||$ 6,471||9.2%|
|Human Resource Specialists||$64, 890||$8,156||$7,575||7.1%|
|Butchers and meat cutters||$31, 740||$2,735||$2,178||20.3%|
|Chefs and Head Cooks||$47, 390||$4,825||$4,056||15.9%|
|Accountants and Auditors||$76,730||$10,571||$9,883||6.5%|
Tax Deductions Under the New Tax Law
IRS data states that more than 70% of American taxpayers claimed the standard deductions on their individual tax returns. With the new plan, taxpayers who claim the standard deduction will have good news: they will be able to reduce their taxable income, and thus, reduce their tax bill.
In addition, Trump tax brackets will eliminate many deductions. These deductions include state and local income tax deduction and student loan interest deduction. Meanwhile, 50% will be deducted from the mortgage interest deduction. Since this will be cut in half, it will affect home buyers in upscale housing markets.