Home > Taxes > 15 Things You Should Know About the Different Tax Brackets

Comments 0 Comments

The 2017 Tax Cuts and Jobs Act went into effect on January 3. As part of the new legislation, all of the tax brackets have changed. For most Americans, the changes will offer some tax relief. However, the majority of the impact of the new legislation will be on businesses.

Both single filers and couples filing jointly will see differences in their tax liability. Let’s take a look at 15 things you need to know about the new income brackets and tax rates and how they’ll affect you.

  1. 7 tax brackets remain

    The Act keeps the seven income tax brackets but lowers the tax rates for each. That means most Americans will see some relief when it’s time to figure how to pay those taxes.

  2. New percentages for single and joint filers

    For both single filers and married couples filing jointly the tax rates will range from 10 percent for the lowest earners, and up to 37 percent for the highest earners.

  3. You’re already reaping the benefits

    Employees began seeing the changes — more money in their paychecks — in their February 2018 paychecks.

  4. The new tax rates aren’t indefinite

    Because this legislation was passed with the intention of offering immediate tax cuts to Americans, it won’t last forever. It’s important to remember, however, that tax laws inevitably change depending on the administration. These new tax rates will revert to 2017 rates in 2026.

  5. The income levels will rise each year with inflation

    Income levels in each bracket will rise, but they will rise more slowly than in the past because the Act uses the chained consumer price index. Over time, that will move more people into higher tax brackets.

  6. The old tax brackets

    Once the tax rates revert back to 2017 levels, they will be 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent.

  7. The new brackets

    For both single and joint filers, the new tax rates are 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent.

  8. Who pays 10 percent?

    In order to fall into the lowest tax rate bracket, a single filer can make up to just $9,525 before being bumped up to the next-highest rate. For those taxpayers filing jointly, they can only make a combined total of $19,050 to stay within the 10 percent tax liability bracket.

  9. Who pays 12 percent?

    The income range for single filers in the 12 percent tax bracket is between $9,525 and $38,700. For joint filers it is between $19,050 and $77,400.

  10. Who pays 22 percent?

    The third tax bracket is the most significant tax liability percentage jump — going from 12 to 22 percent. Single filers in this bracket can make between $38,700 and $82,500, while joint filers can make from $77,400 to $165,000.

  11. Who pays 24 percent?

    Single filers making $82,500 to $157,500 per year will pay 24 percent on their income, while joint filers making between $165,000 and $315,000 will pay this percentage.

  12. Who pays 32 percent?

    This tax rate will apply to single filers making $157,500 to $200,000 annually, and to joint filers making between $315,000 and $400,000.

  13. Who pays 35 percent?

    The income range in this tax bracket represents the biggest jump in terms of income ranges. Single filers can make anywhere between $200,000 and $500,000 and pay 35 percent. Joint filers, meanwhile have an income range of $400,000 to $600,000 in the 35 percent tax bracket.

  14. Who pays the highest tax rate — 37 percent?

    The highest tax burden in the new legislation will be on single filers making $500,000 or more, and on joint filers making $600,000 and up.

  15. Income amounts are different for head of household filers

    For those filing head of household — specifically single filers with dependents, the amounts in each tax bracket differ. For example, a person filing head of household can make up to $13,600 and still fall into the 10 percent tax bracket.

If you’re concerned about your credit this tax season, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.


Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team