2018 Tax Brackets – Lower Rates vs. 2017

The new law passed late last year, called the Tax Cuts and Jobs Act, made some significant changes to your 2018 personal income taxes. Most notably, there were reductions to the seven federal income tax brackets. We’ve provided the new 2018 tax brackets below.

Filing Statuses

First, a quick reminder that there are four common tax filing statuses for ‘resident’ taxpayers (if you are a non-US citizen, you might file as a non-resident).

The filing statuses, which were unchanged in the new law, are:

  • Single: For any non-married individuals without children / dependents
  • Married Filing Jointly (MFJ): The most common filing status for married couples that combines all their finances onto one tax return
  • Married Filing Separately (MFS): Another way for married couples to file that keeps their finances separate.
  • Head of Household (HoH): For non-married individuals who have children / dependents.

2018 Ordinary Income Tax Brackets

The below tax brackets apply to all ‘ordinary’ income in 2018. This includes wages, freelancing income, interest, short-term capital gains, and more.

Tax RateSinglesMFJMFSHoH
10%$0-9,525$0-19,050$0-9,525$0-13,600
12%$9,525-38,700$19,050-77,400$9,525-38,700$13,600-51,800
22%$38,700-82,500$77,400-165,000$38,700-82,500$51,800-82,500
24%$82,500-157,500$165,000-315,000$82,500-157,500$82,500-157,500
32%$157,500-200,000$315,000-400,000$157,500-200,000$157,500-200,000
35%$200,000-500,000$400,000-600,000$200,000-300,000$200,000-500,000
37%$500,000+$600,000+$300,000+$500,000+

2017 Ordinary Income Tax Brackets

For comparison purposes, here are the tax brackets from 2017.

Tax RateSinglesMFJMFSHoH
10%$0-9,325$0-18,650$0-9,325$0-13,350
15%$9,325-37,950$18,650-75,900$9,325-37,950$13,350-50,800
25%$37,950-91,900$75,900-153,100$37,950-76,550$50,800-131,200
28%$91,900-191,650$153,100-233,350$76,550-116,675$131,200-212,500
33%$191,650-416,700$233,350-416,700$116,675-208,350$212,500-416,700
35%$416,700-418,400$416,700-470,700$208,350-235,350$416,700-444,550
39.6%$418,400+$470,700+$235,350+$444,550+

2018 Long-Term Capital Gain Tax Brackets

The below tax brackets have lower, more favorable rates that only apply to long-term capital gains and qualifying dividends. Note that you use your total taxable income (including ordinary income such as wage) to determine which bracket your capital gains fall in.

Tax RateSinglesMFJMFSHoH
0%$0-38,600$0-77,200$0-38,600$0-51,700
15%$38,600-425,800$77,200-479,000$38,600-239,500$51,700-452,400
20%$425,800+$479,000+$239,500+$452,400+

Other Taxes

Don’t forget, there might be other taxes that apply to your income.

For instance, wages and self-employment/freelancing income are subject to payroll taxes. Payroll taxes (also known as FICA taxes) include Social Security and Medicare. For those that are self-employed, your payroll taxes are double since you have to pay both the employee and employer portion.

There can also be state (and even municipal) income taxes, property taxes, sales taxes, and more.

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