Randall S. van Reken, EA, CFP, ATP

Tax Man LLC

​Tax Changes 2018 - The Truth About the Tax Cuts


The Tax Cuts and Jobs Act removed many deductions and personal exemptions about which there is much complaining, but no one seems to be commenting on the reduction of tax rates that is part of the trade-off and, for most people, will be where the real savings comes in.  Here’s the old and the new:


Old Rate          New Rate          Tax Reduction    
0%                   0%                 0%       
(Sorry! - Hard to go below zero)

15%                12%              20% lower
25%                22%              12% lower
28%                24%         14.28% lower
33%                32%           3.03% lower
35%                35%                0% lower
39.6%             37%           2.56% lower


Without boring you with details, the greatest impact and savings are in the brackets up to the 28% level.  Not quite what you read on Facebook is it?!

For example, a single taxpayer with the exact sames taxable income as in 2017 would save according to the following table:

Taxable income               Tax Savings over 2017
    $9,525                                   $0            
    $38,700                                 $875       
    $50,000                                 $1,214    
    $100,000                               $2,553    
    $150,000                               $4,553    
    $200,000                               $3,381