Tax Reform Bill 2017

Tax Reform Bill 2017

Similarly, the tax brackets of married couples have also been changed drastically. According to current tax brackets couples that file jointly, and that earn $0 to $18,650 pay 10% tax, yet the new reform gives such people a levy up to $24,000 in accumulated earnings, in other words, they are exempted from all taxes.

Those that fall in the criteria of $24,000 to $90,000 are to be charged at 12%, however, the current brackets charge all those that earn from $18,650 to $75,900 at 15%. Next up are married couples that earn from 75,900 to 153,100 are charged at 25%, whereas in the new reform individuals that have a cumulative earning from $90,000 to less than $260,000 are charged at the same rate. This results in a tax reduction of 3% and 8%, respectively for those that earn less than $250,000 based on the bracket they fall under.

Furthermore, married couples earning from $260,000 till less than $1,000,000 will be charged at 35% compared to the current $416,700 till $470,700 limit. The 39.6% bracket, however, has seen the largest change, couples earning more than $1,000,000 will now fall in this category, in comparison to the current limits that include couples earning more than $470,700 to be included within this category.

What happens with Small Business Owners?
According to the bill being passed more scrutiny will follow small business owners as to what they include in the personal income and business income, as business incomes have been dropped down to 25 percent. However, this applies only to the top tear bracket of businesses which hardly small business owners reach or are at.

There is also a slashing of itemized deductions being conducted which also can bring a bigger problem for small business owners.

With such drastic and abnormal changes occurring on the taxation system, which has remained consistent for the past three decades, the safest option individuals and small business have, is to entrust tax professionals to manage their taxes for the upcoming 2018 through to 2019. This tax reform also brings to light how clear and transparent books can make a greater difference when filing taxes and preparing for the season. With services such as Monily, you can rest assured to not have to worry about taxation changes, where your books and tax preparation all happens under the same roof.