2018 Income Tax Regulations Every Taxpayer Should Know
This article covers the key updates in 2018 income tax rules, including revised tax brackets, standard deductions, and exemptions. It explains how these changes impact different filing statuses and provides essential information for accurate tax planning and filing. Understanding these adjustments helps taxpayers optimize their tax liabilities and stay compliant with federal regulations for 2018.
Key 2018 Tax Regulations Every Individual Must Be Aware Of
In March 2018, the IRS introduced updated tax brackets, standard deductions, and various credits, phaseouts, and exemptions. With the final tax legislation finalized by Congress, it’s crucial for taxpayers to understand the significant adjustments in 2018 tax rules. These changes impact your tax planning and filing of amended returns. Below are the revised income tax rates and deductions that apply for 2018, essential for accurate tax preparation.
2018 Tax Brackets Overview
These brackets determine your tax liability based on taxable income, not gross income. Different categories apply based on your filing status.
Single Filers (excluding surviving spouses/household heads)
Tax rates start at 10% for taxable income up to $9,525.
Income over $9,525 up to $38,700 is taxed $952.50 plus 12% of the excess.
Within $38,700 to $82,500, the tax owed is $4,453.50 plus 22% on the amount over $38,700.
For income over $82,500 up to $157,500, the tax is $14,089.50 plus 24% on the excess.
Income from $157,500 to $200,000 is taxed $32,089 plus 35% on amounts exceeding $157,500.
Over $200,000 up to $500,000, the tax is $45,689.50 plus 35% on the excess.
Income beyond $500,000 is taxed $150,689.50 + 37% on the amount over $500,000.
Married Filing Jointly & Surviving Spouses
10% on taxable income up to $19,050.
Over $19,050 to $77,400: $1,905 plus 12% of the excess.
$77,400–$165,000: $8,907 plus 22% on the excess.
$165,000–$315,000: $28,179 plus 24% on the excess.
$315,000–$400,000: $64,179 plus 32% on the excess.
$400,000–$600,000: $91,379 plus 35% on the excess.
Over $600,000: $161,379 plus 37% on the amount exceeding $600,000.
Head of Household
Tax begins at 10% for income up to $13,600.
Over $13,600 to $51,800: $1,360 plus 12% of excess.
$51,800–$82,500: $5,944 plus 22% on the excess.
$82,500–$157,500: $12,698 plus 24% on the excess.
$157,500–$200,000: $30,698 plus 32% on the excess.
$200,000–$500,000: $44,298 plus 35% on the excess.
Over $500,000: $149,298 plus 37% on the amount exceeding $500,000.
Married Filing Separately
10% up to $9,525.
Over $9,525 to $38,700: $952.50 plus 12%.
$38,700–$82,500: $4,453.50 plus 22%.
$82,500–$157,500: $14,089.50 plus 24%.
$157,500–$200,000: $32,089.50 plus 32%.
$200,000–$300,000: $45,689.50 plus 35%.
Over $300,000: $80,689.50 plus 37% on the excess.
2018 Standard Deduction & Personal Exemptions
Major adjustments were made to standard deductions and exemptions for 2018. The personal exemption of $4,150 was eliminated under the new tax law. Instead, standard deductions were increased to $24,000 for joint filers and surviving spouses, $18,000 for head of household filers, and $12,000 for single and married filing separately filers. These updates are critical for calculating taxable income accurately for the year.
