- Income tax brackets could change in 2018 if tax legislation is passed under President Donald Trump.
- The Senate’s tax plan proposes keeping seven tax brackets but changes the income ranges.
- The bill proposes eliminating the personal exemption and increasing the standard deduction.
The Senate passed its version of the Tax Cuts and Jobs Act (TCJA) just after 2 a.m. ET on Saturday.
The TCJA passed on a vote of 51 to 49. Sen. Bob Corker was the only Republican to vote against the bill. Its passage brings Republicans a step closer to their first major legislative achievement in the Trump presidency.
President Donald Trump has said he wants tax reform on his desk by Christmas. Negotiators now need to iron out significant differences between the House and the Senate versions of the tax bill, and to pass that updated bill in both chambers.
In the meantime, Business Insider put together two charts showing how the Senate’s tax plan could change federal income-tax brackets in 2018 compared with those in 2017.
First, for single filers:
And second, for joint filers:
Under the Senate’s plan, there would still be seven federal income brackets but at slightly lower rates and adjusted income ranges. The brackets proposed are 10%, 12%, 22%, 24%, 32%, 35%, and 38.5%.
In 2017, the standard deduction for a single taxpayer is $US6,350, plus one personal exemption of $US4,050.
The Senate proposal would combine those into one larger standard deduction for 2018: $US12,000 for single filers and $US24,000 for joint filers.
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