Updated: August 7, 2018 The new tax law has has gone into effect starting January 1, 2018. There are many changes to the U.S. tax code, including the tax brackets and tax rates. Let's go over the new rates and brackets.
The number of tax brackets remains the same but overall rates have gone down. For example, a married couple making $80,000 will land in the 25 percent tax bracket for their 2017 returns. That same couple will land in the 22 percent bracket for their 2018 tax returns. Note: The new tax brackets don't apply to your 2017 tax returns. When you're filing and paying taxes in April of 2018, you'll use the 2017 rates. When you're filing your 2018 taxes by April of 2019, the new rates will apply.
You can use these tax rates to determine what you owe for the 2018 tax year. You typically file those taxes by April, 2019. Use these rates for the 2019 tax year, which you'll file returns for in April 2020.
The same tips apply to the new tax rates as to the old: maximize your tax-advantaged accounts and try to get as many deductions as you are eligible. The new tax law doubles the standard deduction, which may help a lot of you save on taxes. For those who are self-employed, don't forget to get the most out of all your business expenses, including mileage. Your miles are worth more in 2018. You may want to try out a mileage tracker app for your drives.