Tax Code
We started from a humble beginning
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Effects of the 2017 Tax Laws
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act. It cuts individual income tax rates, doubles the standard deduction, and eliminates personal exemptions. The top individual tax rate drops to 37%. The Act cut the corporate tax rate from 35% to 21% beginning in 2018. The corporate cuts are permanent, while the individual changes expire at the end of 2025.
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If you notice the tax cuts for corporations are permanent but the tax cuts for individuals expire in 2025; this means that 2025 will present a new set of potential issues for W-2 employees. We obviously cannot change what has been established, but we can use it to our advantage. The Act lowers tax rates but keeps the seven income tax brackets.These rates revert in 2026. The highest tax bracket is $500,000 for single people and $600,000 for married couples. Beginning in 2018, they pay a 37% rate after exemptions and deductions. That's lower than the 2017 rate of 39.6%. The income levels rise each year with inflation. As a result, more people are subject to the highest bracket than they would have been under the old method. By 2025, 8.9% of taxpayers will pay more than they would have under the previous tax law. In 2018, only 4.8% of households paid more.
