Love it or hate it, the new Tax Act is law. So the question is, how will it impact YOUR finances in 2018? Check out this infographic to learn about three common scenarios.
1. How Will
The New Tax Bill
Affect You? $
?
?
?
Before Tax ActSo What’s Changed?
Estimated Tax Savings
$1,100/year
No Dependents
$50,000 Income
Takes Standard Deduction
*Standard deductions and exemptions reduce taxable income.
*Standard deductions and exemptions reduce taxable income.
Love it or hate it, the Tax Cuts and Jobs Act is now law. So the question is,
how will it impact your finances in 2018? While the answer depends on your
unique situation, here are three common scenarios:
Standard Deduction*
Exemptions* per person
Relevant Tax Brackets
$6,500
$4,150
10%, 15%, 25%
Increase in long-run full-time equivalent jobs
339,000
Increase in long-run capital stock 4.8%
Increase in long-run GDP1.7%
Sources
CREATED BY
• ”How The Final Version Of The Republican Tax Bill Would Affect You”, 2017, NPR
• ”Preliminary Details and Analysis of the Tax Cuts and Jobs Act”, 2017, Tax Foundation
• ”Trump's Tax Plan and How It Affects You”, 2017, The Balance
• ”The Trump tax calculator — will you pay more or less?”, 2017, MarketWatch
• http://taxplancalculator.com/
I Am: Single
After Tax Act
$12,000
Eliminated
10%, 12%, 22%
I Am: Married
So What’s Changed?
Estimated Tax Savings
$4,200/year
Before Tax Act: Business owners pay personal tax rate on all business profits.
After Tax Act: First 20% of small business profit (owner income) will be
tax free (Standard Deduction).
I Am: A Small
Business Owner
Married
1 Child
$100,000 Business Income
So, How Will It
Affect The Economy?
2 Children
$100,000 Household Income
Takes Standard Deduction
Estimated Tax Savings
$2,800/year
Before Tax ActSo What’s Changed?
Standard Deduction*
Exemptions* per person
Reduce Taxes Due
Relevant Tax Brackets
$13,000
$4,150
$1,000/child
10%, 15%, 25%
After Tax Act
$24,000
Eliminated
$2,000/child
10%, 12%, 22%
Many of the tax cuts will expire
at the end of 2025
Increases the deficit by $1 trillion
over the next 10 years.
Increase in long-run wage rate1.5%
