Donald Trump's new tax plan was passed in the U.S. Congress and signed into law by President Trump on December 22, 2017.
The Trump's new tax plan starts to take effect on January 1, 2018 - but does not affect the yearly 1040 Income Tax Forms you file with the IRS (Internal Revenue Service) until April 2019.
Trump's New Tax Plan makes many changes. Here are just a few of the changes:
TAX RATE & BRACKET CHANGES
'Tax brackets" are the ranges of wages (hourly pay) or salary (monthly pay) that workers receive that require a "tax rate" to be paid. Tax rates are percentages. Here are tables of Old Tax Rates and Brackets - and New Tax Rates and Brackets:
OLD TAX RATES & BRACKETS NEW TAX RATES & BRACKETS
SINGLE PERSONS
10% $0 - $9,325 yearly 10% $0 - $9,525 yearly
15% $9,326 - $37,950 yearly 12% $9,526 - $38,700 yearly
25% $37,951 - $91,900 yearly 22% $38,701 - $82,500 yearly
28% $91,901 - $191,650 yearly 24% $82,501 - $157,500 yearly
33% $191,651 - $416,700 yearly 32% $157,501 - $200,000 yearly
35% $416,701 - $418,400 yearly 35% $200,001 - $500,000 yearly
39.6% $418,401 or more 37% $500,001 or more
MARRIED COUPLES/JOINT FILERS
10% $0 - $18,650 yearly 10% $0 - $19,050 yearly
15% $18,651 - $75,900 yearly 12% $19,051 - $77,400 yearly
25% $75,901 to $153,100 yearly 22% $77,401 - $165,000 yearly
28% $153,101 - $233,350 yearly 24% $165,001 - $315,000 yearly
33% $233,351 - $416,700 yearly 32% $315,001 - $400,000 yearly
35% $416,701 - $470,000 yearly 35% $400,001 - $600,000 yearly
39.% $470,701 or more 37% $600,001 or more
STANDARD DEDUCTION GOES UP
The "standard deduction" is the part of your yearly income that is not taxed and can be used to reduce your yearly wage or salary. Standard deduction is used if you do not decide to "itemize deductions" (that is, list your expenses item by item). Workers with high yearly incomes, who own homes, or are self-employed usually itemize deductions. Workers with lower incomes usually use the standard deduction (do not list their expenses item by item).
In the new tax plan, standard deduction goes up from $6,350 to $12,000 for a single person - and from $12,700 to $24,000 for married couples. In addition, the standard deduction for children will go from $1,000 per child under 17 years old to $2,000 per child under 17 years old.
PERSONAL EXEMPTIONS GONE
For wages and salary earned in 2017, you can take $4,050 off your income for yourself and each child under 17 years old.
But in 2018, you cannot take any money off your income for yourself and each child. Personal exemptions were
eliminated to be replaced by standard deductions only.
U.S. Work World lesson Trump's Tax Plan Explained also covers:
LIMITS STATE & LOCAL TAXES TO $10,000
LIMITS HOME LOAN INTEREST TO $750,000 LOAN
TAX RATE FOR BUSINESS DROPS FROM 35% TO 21%
If your students want to know about Trump's Tax Plan, sign in to
usworkworld.com, go to Career Lessons, and download Trump's Tax Plan
