2018 Income Tax Rates Overview and Key Changes
This article provides a comprehensive overview of the 2018 income tax rates, highlighting major changes introduced by the Tax Cuts and Jobs Act. It covers new tax brackets, standard deductions, and key modifications affecting individual and joint filers, helping taxpayers understand how to navigate their 2018 taxes effectively and optimize deductions.
Guide to 2018 Income Tax Rates and Adjustments
Following President Trump's signing of the Tax Cuts and Jobs Act on December 22, 2017, significant modifications to tax regulations took effect in 2018. The IRS updated tax brackets and rates, impacting how Americans calculate their taxes. It's important to review the 2018 tax rate schedule when filing for 2018–2019, as it reflects new income thresholds and rates compared to previous years. Taxable income excludes gifts, inheritances, and educational funds, focusing solely on earned income. The number of tax brackets remains at seven, but rates are now set at 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
For individuals: $0–$9,525 at 10%, up to over $500,000 at 37%
Married filing jointly: $0–$19,050 at 10%, over $600,000 at 37%
Head of household: $0–$13,600 at 10%, over $500,000 at 37%
Married filing separately: similar brackets with standard deduction of $12,000
The standard deduction increased to $12,000 for individuals and $24,000 for joint filers. Additional deductions for seniors and the blind are $1,300 (or $1,650 if unmarried). Personal exemptions were eliminated in 2018, but the AMT exemption was adjusted for inflation: $70,300 for single filers, $109,400 for joint filers, and $54,700 for separated filers. Itemized deductions now cap state and local taxes at $10,000, and mortgage interest is deductible up to loans of $750,000, down from $1 million. The changes in the 2018 tax framework aim to expand standard deductions and simplify tax filing, offering more tax-saving opportunities.
