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In December of 2017, Congress passed the TAX CUTS AND JOBS ACT, which was subsequently signed into law by President Donald Trump. What most people want to know though is how does this affect me and my life? Here’s a simple breakdown of what this new law looks like overall.

          In December of 2017, Congress passed the TAX CUTS AND JOBS ACT, which was subsequently signed into law by President Donald Trump. What most people want to know though is how does this affect me and my life? Here’s a simple breakdown of what this new law looks like overall.

 

          The TAX CUTS AND JOBS ACT will maintain the same seven-bracket structure that was in force previously. However, Congress has tweaked the rates and the income levels at which they apply.

 

          Prior to the new law, the seven tax brackets were 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent.

 

          Now, the tax code pegs the new rates at 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent.

  

        By comparison, the way the seven tax brackets worked before versus now are as follows:

 

2017 2018
10%—$0 to $18,650 10%—$0 to $19,500
15%—$18,651 to $75,900 12%—$19,501 to $77,400
25%—$75,901 to $153,100 22%—$77,401 to $165,000
28%—$153,101 to $233,350 24%—$165,001 to $315,000
33%—$233,351 to $416,700 32%—$315,001 to $400,000
35%—$416,701 to $470,700 35%—$400,001 to $600,000
39.6%—$470,701 or more 37%—$600,001 or more
Standard Deduction = $12,700 Standard Deduction = $24,000
 Personal Deduction = $8,100 Personal Deduction = Eliminated

 

          Overall, this will be good news for most of us as about 70% of Americans claim the standard deduction when filing their taxes. Ultimately, our paychecks will almost certainly increase — albeit slightly. And who doesn’t like to see an increase in their salaries and paychecks?