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What the Tax Cuts Mean for You - SimpliFi
With tax season around the corner, this will be the first time folks will be filing under the new rules of the Tax Cuts and Jobs Act. Not surprisingly, they want to know, “How will this impact me and my family?” Below we’ve summarized some of the key items that have changed under the new law, what’s stayed the same, and what all that might mean for you. Lower Rates and New Income Ranges There are still seven tax brackets, just like before. The good news is that many of the tax rates have been lowered. So, most folks will find themselves in a slightly lower tax rate. And as the saying goes, “a penny saved is a penny earned.” Here are the old and new rates: The OLD brackets were: 10%, 15%, 25%, 28%, 33%, 35% and 39.6% The NEW brackets are: 10%, 12%, 22%, 24%, 32%, 35% and 37% Since the new Act changed the income thresholds at which the rates apply, your filing status (Joint, Single, etc.) will determine which income threshold applies to you. No Changes to Social Security The new rules won’t have a direct impact on the taxes that apply to your Social Security benefits. Just like before, those benefits will continue to be subject to federal income taxes, based on your combined income. Indirectly, however, the lowered income tax rates could mean that the taxes you pay on your Social Security benefits could be lower. Limits on State and Property Tax Deductions Less [...]