With the new president comes the potential for big changes when it comes to tax brackets. These changes could end up saving you a lot of money or costing you a bit more. Let’s take a look at the biggest changes so you can prepare for a future tax season.
Fewer tax brackets – Instead of the previous seven brackets, there would be only three. For example: the previous seven brackets 10%, 15%, 25%, 28%, 33%, 35% and 39.6% v.s. 12%, 25% and 33%. Overall, this will reduce income tax for married couples and the wealthy.
Here are the dollar amounts related to the three new brackets. The lowest bracket is classified as single filers with income $0 – $37,500 and married filers with income $0 – $75,000. The second bracket is single filers $37,500 – $112,500, married filers $75,000 – $225,000. The third bracket is anything above $112,500 for singles and $255,000 for married filers.
Deductions – Overall, more deductions, as the standard deduction would be raised to $15,000 for singles and $30,000 for couples. The itemized deductions would be capped at $100,000 for singles and $200,000 for couples.
Risen rates – Those who were in the upper part of the 28% tax bracket would be bumped up to the 33% bracket, and those on the low end of the 10% bracket would be in the 12% bracket. Singles and married couples in the upper part of the 28% bracket would then pay about $3,500 more for singles and $400 more for married couples.
With this, you can take precautions with your money and start preparing for any changes that might come in a future tax season! Call or email me if you have any questions or you need any help with taxes this tax season!
A Mazzo Accounting provides a variety of tax and accounting services to individuals and businesses in the Wyomissing, Reading, West Reading, Sinking Spring and Kenhorst areas, as well as towns and villages around the Greater Reading area. Our services for small to mid-size businesses include taxes, payroll services, accounting services, and bookkeeping services. We also provide a variety of services for individuals and they include tax return preparation as well as some accounting assistance.
Reference: http://fortune.com/2016/12/12/donald-trump-tax-plan-charts/
http://www.moneytalksnews.com/how-the-trump-tax-plan-will-hit-you/