New Tax Bill – How It Will Affect You?

By Ron Leiber and Tara Seigel Bernard

(UPDATED) — Republican lawmakers passed a sweeping tax overhaul this week. Several of the most anticipated changes — such as a significant increase in the standard deduction and the curtailing of state and local income tax breaks — made the final cut of the bill. Some of the most controversial proposals, like eliminating the medical deduction, were wiped away.

Many of these provisions are temporary, however, and are set to expire after seven years. They all take effect in 2018, unless noted otherwise.

Tax Brackets

NOW Seven brackets, with a top rate of 39.6 percent, which people pay on income they earn beyond $470,700 for couples filing their taxes jointly or $418,400 as an individual.

NEW PLAN Seven brackets, with a top rate of 37 percent, which married people filing jointly will pay on income they earn in excess of $600,000. If you’re single, the top rate applies to income earned beyond $500,000. Capital gains and qualified dividend rates are unchanged.

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