The tax code has always been a difficult thing to understand for many Americans, and the recent passage of a new tax bill has served to further muddy the waters for a lot of people. Whether you file taxes on your own or you get help from a tax filing service in Des Moines, IA, it’s important that you understand the basics of the current tax law and how it differs from the most recent iteration of the tax bill.
Part of understanding the new tax bill is taking a look at the tax rates of the standard seven tax brackets. Although the number of tax brackets and the income level of each bracket has not changed, the income tax rate for most brackets has been cut. In addition to this, there have also been changes made to deductions and exemptions. Taking all of this information into account will give you a better handle on the new tax bill specifically as it relates to your tax filing.
Understanding tax brackets
For those who are single and making $9,525 or less or married filing jointly and making $19,050 or less, the income tax rate has been kept at 10 percent in the new tax bill. Single people making between $9,525 and $38,700 and married people making between $19,050 and $77,440 will see a three percent cut in their income tax rate, from 15 percent to 12 percent. The next bracket, single filers making between $38,700 and $82,500 and married filers making between $77,400 and $165,000, will get a cut of three percent, from 25 percent to 22 percent. Single filers making between $82,500 and $157,000 and married filers who make between $165,000 and $315,000 also get a cut, from 28 percent to 24 percent.
The next bracket, single people who make $157,500 to $200,000 and married people making $315,000 to $400,000, will get a less-substantial cut—one percent down to 32 percent from 33 percent. Single earners making between $200,000 and $500,000 and married earners making between $400,000 and $600,000 may actually see an increase in their taxes. The old rate for this bracket was between 33 percent and 35 percent, and that has been brought up to an even 35 percent under the new tax bill. The final tax bracket, however, will also have their taxes cut. Single earners making over $500,000 and married earners making over $600,000 will be taxed 37 percent instead of the previous rate of 39.6 percent.
Contact a tax filing service in Des Moines, IA
If you have additional questions about what the new changes to the tax bill mean to you, you can get the answers you’re looking for from the knowledgeable team at Accounting & Tax Professionals, PLC. Since 1997, we have been helping our customers with small business accounting, audit representation, notary services and tax filing service in Des Moines, IA. Regardless of which specific service you are looking for, we would be glad to help you. Give us a call to speak with one of our tax and accounting professionals for assistance.