The full impact of the Tax Cuts and Jobs Act won’t be felt until a year from now, when you file your 2018 tax return.
Most Americans will enjoy a tax cut, at least for the next eight years, but the benefits—or costs—of the law will depend on a lot of factors, ranging from the size of your family and how much you earn to where you live. This special report explains what to expect and what you can do now to make the most of the most sweeping rewrite of the tax code since the last time the Chicago Bears won the Super Bowl.
The new law will reduce taxes for millions of taxpayers by lowering income tax rates across the board. For example, if your top 2017 tax rate was 25%, it falls to 22% in 2018, and a chunk of your income that used to be taxed at 15% will now be taxed at a new 12% rate. These rate cuts will expire in 2025 unless Congress agrees to extend them.
But the most sweeping change for individuals nearly doubles the standard deduction to $12,000 for single filers, $18,000 for head-of-household filers and $24,000 for married couples who file jointly. Taxpayers age 65 or older and blind people get even higher standard deductions. A single taxpayer age 65 or older will get an additional $1,600. Two 65-year-olds filing a joint return will get an extra $2,600. The law retains the alternative minimum tax but significantly reduces the number of taxpayers who will have to pay it.
FAMILIES
This story is from the March 2018 edition of Kiplinger's Personal Finance.
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This story is from the March 2018 edition of Kiplinger's Personal Finance.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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