Q: What Are the 2018 Federal Income Tax Brackets and Tax Rates?

2018’s federal income tax brackets and tax rates are new as a result of the Tax Cuts and Jobs Act (TCJA), which made substantial changes that are impacting businesses and individuals of all economic situations.

Estimate how much you’ll owe with these new tax rates by using the 2018 tax tables below.

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What are the 2018 individual income tax tables?

Your 2018 federal income tax bracket and tax rates depend on your filing status.

Here’s how to use the following federal tax tables when you prepare your 2018 tax returns in 2019:

1. Determine your filing status to know which tax table to use.

There are five filing statuses on the federal tax return:

  • Single
  • Married filing jointly
  • Married filing separately
  • Qualifying widow(er)
  • Head of household

2. Then calculate your taxable income so you know which tax bracket to use. (Not sure how? Check out this article on calculating your taxable income.)

3. Find the tax bracket that your taxable income falls in. For example, if you file taxes as a single person and have $40,000 in taxable income, use the $38,701 – $82,500 bracket.

4. Look to the column next to your tax bracket to identify your tax rate.

5. Then look to the next column to find out how much tax you’d owe. For the single filer $40,000 scenario, the tax due is $4,453.50 plus 22% of the amount over $38,700.

It’s a common misconception that making more money means all of your income will be taxed at a higher rate. Instead, only the money that you earn within each higher bracket is subject to the respective tax rate.

Single

You may file your tax return as single if

  • you’re unmarried, divorced, or legally separated from a spouse as of December 31, 2018, and
  • you don’t qualify for any of the other filing statuses.

Single

Taxable IncomeTax RateTax Due
$0 – $9,52510%10% of taxable income
$9,526 – $38,70012%$952.50 plus 12% of the amount over $9,525
$38,701 – $82,50022%$4,453.50 plus 22% of the amount over $38,700
$82,501 – $157,50024%$14,089.50 plus 24% of the amount over $82,500
$157,501 – $200,00032%$32,089.50 plus 32% of the amount over $157,500
$200,001 – $500,00035%$45,689.50 plus 35% of the amount over $200,000
$500,001 or more37%$150,689.50 plus 37% of the amount over $500,000

Married Filing Jointly or Qualifying Widow(er)

You may file your tax return as married filing jointly if you’re legally married. When filing under this status, couples can record their respective incomes, exemptions, and deductions on the same tax return.

The qualifying widow(er) status uses the same tax brackets. It’s available for widows and widowers who have dependents for two years after their spouse’s death.

You’re eligible to file your 2018 return as a qualifying widow(er) if you meet all of these requirements:

  • You were eligible to file a joint return with your spouse the year they died.
  • Your spouse died in 2016 or 2017, and you didn’t remarry in 2018.
  • You paid more than half of the cost of maintaining a home in 2018.
  • You have a child or stepchild who lived in your home all of 2018 and whom you can claim as a dependent. This child or stepchild can also count if the only reason you couldn’t claim them as a dependent was that:
    • The child had a gross income of $4,050 or more,
    • The child filed a joint return, or
    • Someone else could claim you as a dependent on their return.

If your spouse passed away in 2018, however, you should still file as Married Filing Jointly.

Married Filing Jointly or Qualifying Widow(er)

Taxable IncomeTax RateTax Due
$0 – $19,050 10%10% of taxable income
$19,051 – $77,40012%$1,905 plus 12% of the amount over $19,050
$77,401 – $165,00022%$8,907 plus 22% of the amount over $77,400
$165,001 – $315,00024%$28,179 plus 24% of the amount over $165,000
$315,001 – $400,00032%$64,179 plus 32% of the amount over $315,000
$400,001 – $600,00035%$91,379 plus 35% of the amount over $400,000
$600,001 or more37%$161,379 plus 37% of the amount over $600,000

Married Filing Separately

You may file your tax return as married filing separately if you’re legally married and choose to record your respective incomes, exemptions, and deductions on separate tax returns.

Married Filing Separately

Taxable IncomeTax RateTax Due
$0 – $9,52510%10% of taxable income
$9,526 – $38,70012%$952.50 plus 12% of the amount over $9,525
$38,701 – $82,50022%$4,453.50 plus 22% of the amount over $38,700
$82,501 – $157,50024%$14,089.50 plus 24% of the amount over $82,500
$157,501 – $200,00032%$32,089.50 plus 32% of the amount over $157,500
$200,001 – $300,00035%$45,689.50 plus 35% of the amount over $200,000
$300,001 or more37%$80,689.50 plus 37% of the amount over $300,000

Head of Household

The head of household status comes with higher standard deductions and lower tax rates than the married filing separately or single statuses.

You may file your tax return as head of household if you can answer yes to all of the following:

  • You are unmarried on the last day of 2018.
  • You paid more than half the cost of maintaining a home during the year.
  • A qualifying person, such as your child, lived in your home for more than half of 2018. (The exception here is dependent parents. They don’t have to live with you.)

If you own a home but live alone, you’d file as single.

Head of Household

Taxable IncomeTax RateTax Due
$0 – $13,60010%10% of taxable income
$13,601 – $51,80012%$1,360 plus 12% of the amount over $13,600
$51,801 – $82,50022%$5,944 plus 22% of the amount over $51,800
$82,501 – $157,50024%$12,698 plus 24% of the amount over $82,500
$157,501 – $200,00032%$30,698 plus 32% of the amount over $157,500
$200,001 – $500,00035%$44,298 plus 35% of the amount over $200,000
$500,001 or more37%$149,298 plus 37% of the amount over $500,000

So, how did tax brackets and tax rates change in 2018?

Generally, federal tax rates are lower.

There are still seven federal income tax brackets, but overall the rates have decreased. The new tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, depending on your tax bracket.

The highest rate has been reduced from 39.6% in 2017 to 37% in 2018.

The lowest rate is still 10%, but it now covers more income.

For instance, in 2017, the lowest tax bracket for the single filing status covered taxable income from $0 to $9,325. In 2018, that bracket covers taxable income from $0 to $9,525. This means more of your income will be taxed at the lowest rate, which results in you paying fewer tax dollars.

These lower tax rates will expire in 2025 and revert to pre-TCJA status unless Congress votes to extend them. Prior to the TCJA, the income tax rates were 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.

Is there anything else I need to know?

Have you gotten married, bought a house, or started a business?

If there have been any significant changes in your life, the IRS encourages you to use their Withholding Calculator for a quick “paycheck checkup.”

Checking your withholding can help protect against having too little tax withheld, which means you could face an unexpected tax bill or penalty during tax season. But it’s up to you. If you’d prefer to have less tax withheld up front and receive more in your paychecks, that’s okay, too.

If you need help, speak with your accountant or tax attorney.

Comments

  • CHARLES

    You failed to mention the deduction for those over 65

    Reply
    • Gusto Editors

      Hi Charles—thanks for your comment! You’re correct that taxpayers over 65 get an increased standard deduction. The focus of this article is on tax tables and rates, and not standardized vs. itemized deductions. However, if we decide to publish a piece on different types of tax deductions, we’ll be sure to mention this one!

      Reply

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