What the House tax bill holds for individuals – Journal of Accountancy

Here is a great article posted by Alistair M. Nevius, J.D. at the Journal of Accountancy:

What the House tax bill holds for individuals – Journal of Accountancy

Below are highlights from the article:


 

Tax rates

Under the bill, individuals would be subject to four tax rates, instead of the current seven: 12%, 25%, 35%, and 39.6%, effective for tax years after 2017. The rates under the bill would be as follows:

Single taxpayers

Taxable income over But not over Is taxed at
$0 $45,000 12%
$45,000 $200,000 25%
$200,000 $500,000 35%
$500,000 39.6%

Married taxpayers filing jointly and surviving spouses

Taxable income over But not over Is taxed at
$0 $90,000 12%
$90,000 $260,000 25%
$260,000 $1,000,000 35%
$1,000,000 39.6%

Married taxpayer filing separately

Taxable income over But not over Is taxed at
$0 $45,000 12%
$45,000 $130,000 25%
$130,000 $500,000 35%
$500,000 39.6%

Heads of household

Taxable income over But not over Is taxed at
$0 $67,500 12%
$67,500 $200,000 25%
$200,000 $500,000 35%
$500,000 39.6%

Estates and trusts

Taxable income over But not over Is taxed at
$0 $2,550 12%
$2,550 $9,150 25%
$9,150 $12,500 35%
$12,500 39.6%

Capital gains: The bill would create three capital gains tax thresholds. Capital gains that would otherwise be taxed as ordinary income below the “15-percent rate threshold” will be taxed at 0%. Capital gains that would otherwise be taxed as ordinary income below the “20-percent rate threshold” will be taxed at 15%. Capital gains that would otherwise be taxed as ordinary income above that threshold will be taxed at a 20% rate.


 

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