How your tax bracket could change in 2018 under Trump's tax plan, in two charts
- Tax reform under President Donald Trump could lead to new tax brackets in 2018.
- The House Republicans' tax plan proposes simplifying the current seven tax brackets down to four.
- The Senate Republicans' tax plan proposes keeping seven, but changing the income ranges.
- Both plans propose eliminating the personal exemption and increasing the standard deduction.
House and Senate Republicans have taken two different approaches in their attempt to overhaul the US tax code by releasing separate proposals with sweeping changes.Last week, House GOP leaders unveiled the " Tax Cuts and Jobs Act ," before adding last minute-adjustments this week . Senate Republicans, meanwhile, debuted their own attempt at tax reform on Thursday, containing some substantial departures from the House's version.
Under the House plan, federal income-tax brackets would be simplified down to four from the seven we have today. The federal income brackets proposed are: 12%, 25%, 35%, and 39.6%.
The Senate Republicans' version would keep seven brackets, but at slightly lower rates and adjusted income ranges. The tax brackets proposed under the plan are: 10%, 12%, 22.5%, 25%, 32.5%, 35%, and 38.5%.
Business Insider put together two charts showing what we know so far about how both the House's tax plan and the Senate's tax plan could change the federal income-tax brackets in 2018 compared to 2017 tax brackets.
First, for single filers:
Most Americans - about 70% - claim the standard deduction when filing their taxes. For those who do, their paychecks will almost certainly increase if either the House or Senate tax plan passes.
In 2017, the standard deduction for a single taxpayer is $6,350, plus one personal exemption of $4,050.
The House proposal essentially combines those into one larger standard deduction for 2018: $12,200 for single filers and $24,400 for joint filers. Under the Senate proposal, these would be slightly lower at $12,000 for single filers and $24,000 for joint filers.