​Federal Tax Brackets for 2017 and 2018

​Federal Tax Brackets for 2017 and 2018

With the massive tax overhaul that came with the Tax Cuts & Jobs Act (TCJA), as a small business owner you’ll definitely want to be aware of the new federal income tax brackets and how they could affect you.

2017 Federal Tax Brackets (For Taxes Due April 17, 2018)

Here are the 2017 federal tax brackets for filers who are single, married, or head of household. Depending on how much income you earn, you may fall in the following tax brackets (between 10 percent and 39.6 percent). For the 2017 tax year, your filing deadline is Tuesday, April 17, 2018.

2017 Single Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $9,325 10% of taxable Income
15% $9,326 to $37,950 $932.50 plus 15% of the amount over $9,325
25% $37,951 to $91,900 $5,226.25 plus 25% of the amount over $37,950
28% $91,901 to $191,650 $18,713.75 plus 28% of the amount over $91,900
33% $191,651 to $416,700 $46,643.75 plus 33% of the amount over $191,650
35% $416,701 to $418,400 $120,910.25 plus 35% of the amount over $416,700
39.6% $418,401+ $121,505.25 plus 39.6% of the amount over $418,400

2017 Married, Filing Jointly Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $18,650 10% of taxable income
15% $18,651 to $75,900 $1,865 + 15% of the amount over $18,650
25% $75,901 to $153,100 $10,452.50 + 25% of the amount over $75,900
28% $153,101 to $233,350 $29,752.50 + 28% of the amount over $153,100
33% $233,351 to $416,700 $52,222.50 + 33% of the amount over $233,350
35% $416,701 to $470,700 $112,728 + 35% of the amount over $416,700
39.6% $470,701+ $131,628 + 39.6% of the amount over $470,700

2017 Married, Filing Separately Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $18,650 10% of taxable income
15% $18,651 to $75,900 $932.50 + 15% of the amount over $9,325
25% $75,901 to $153,100 $5,226.25 + 25% of the amount over $37,950
28% $153,101 to $233,350 $14,876.25 + 28% of the amount over $75,550
33% $233,351 to $416,700 $26,111.25 + 33% of the amount over $116,675
35% $416,701 to $470,700 $56,364 + 35% of the amount over $208,350
39.6% $470,701+ $65,814 + 39.6% of the amount over $235,350

2017 Head of Household Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $13,350 10% of taxable income
15% $13,351 to $50,800 $1,335 plus 15% of the amount over $13,350
25% $50,801 to $131,200 $6,952.50 plus 25% of the amount over $50,800
28% $131,201 to $212,500 $27,052.50 plus 28% of the amount over $131,200
33% $212,501 to $416,700 $49,816.50 plus 33% of the amount over $212,500
35% $416,701 to $444,550 $117,202.50 plus 35% of the amount over $416,700
39.6% $444,5551+ $126,950 plus 39.6% of the amount over $444,550

2017 Standard Deduction and Personal Exemption

 

Status Filing Status Deduction Amount
Single $6,350
Married, Filing Jointly $12,700
Head of Household $9,350
Personal Exemption $4,050

2018 Federal Tax Brackets

And just so you’re aware of what’s to come, here are the federal tax brackets for 2018 for single, married, and head of household taxpayers. These new tax brackets will be between 10 percent and 37 percent.

The deadline to file taxes for 2018 will be Monday, April 15, 2019.

2018 Single Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $9,525 10% of taxable income
12% $9,526 to $38,700 $952.50 + 12% of the amount over $9,525
22% $38,701 to $82,500 $4,453.50 + 22% of the amount over $38,700
24% $82,501 to $157,500 $14,089.50 + 24% of the amount over $82,500
32% $157,501 to $200,000 $32,089.50 + 32% of the amount over $157,500
35% $200,001 to $500,000 $45,689.50 + 35% of the amount over $200,000
37% $500,001+ $150,689.50 + 37% of the amount over $500,000

2018 Married, Filing Jointly Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $19,050 10% of taxable income
12% $19,051 to $77,400 $1,905 + 12% of the amount over $19,050
22% $77,401 to $165,000 $8,907 + 22% of the amount over $77,400
24% $165,001 to $315,000 $28,179 + 24% of the amount over $165,000
32% $315,001 to $400,000 $64,179 + 32% of the amount over $315,000
35% $400,001 to $600,000 $91,379 + 35% of the amount over $400,000
37% $600,000+ $161,379 + 37% of the amount over $600,000

2018 Married, Filing Separately Taxable Income Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $9,525 10% of taxable income
12% $9,526 to $38,700 $952.50 + 12% of the amount over $9,525
22% $38,701 to $82,500 $4,453.50 + 22% of the amount over $38,700
24% $82,501 to $157,500 $14,089.50 + 24% of the amount over $82,500
32% $157,501 to $200,000 $32,089.50 + 32% of the amount over $157,500
35% $200,001 to $300,000 $45,689.50 + 35% of the amount over $200,000
37% $300,000+ $80,689.50 + 37% of the amount over $300,000

2018 Heads of Households Tax Brackets and Rates

Rate Taxable Income Bracket Tax Owed
10% $0 to $13,600 10% of taxable income
12% $13,601 to $51,800 $1,360 + 12% of the amount over $13,600
22% $51,801 to 82,500 $5,944 + 22% of the amount over $51,800
24% $82,501 to $157,500 $12,698 + 24% of the amount over $82,500
32% $157,501 to $200,000 $30,698 + 32% of the amount over $157,500
35% $200,001 to $500,000 $44,298 + 35% of the amount over $200,000
37% $500,001+ $149,298 + 37% of the amount over $500,000

Standard Deductions

While the personal exemption for the 2018 tax year will be nixed, the standard deduction will be bumped up $5,500 for single filers and $11,000 for married couples that are filing jointly.

2018 Standard Deduction

Filing Status Deduction Amount
Single $12,000
Married Filing Jointly $24,000
Head of Household $18,000

The new tax plan has the potential to save a small business owner a sizable amount of money in taxes, explains Michael Dinich, a financial advisor at Your Money Matters. But, as you may imagine, the bill is fairly complicated. “Small business owners will have to navigate the bill to determine what type of business entity and tax structure is the most advantageous for their situation,” says Dinich.

“Many small businesses use a Schedule C to report business profits and losses. The new bill includes a 20 percent deduction for pass-through income, so it may be the time for a small business owner to consider an LLC or S Corp.” A pass-through entity will add some administrative costs as well as additional setup, accounting, and tax preparation expenses, so business owners will want to determine what cost savings are expected before rushing into a new filling arrangement, explains Dinich.

If you have any questions about what business structure is right for your company or would like help filing your business taxes, Incfile is here for you. You can speak to a representative at Incfile’s business taxes service for professional advice, and even get assistance filing your business taxes.

Jackie Lam

Founder at Cheapsters
Jackie is the founder of Cheapsters, a website dedicated to helping freelancers. She is passionate and dedicated copywriter and personal finance writer with nearly 10 years experience in copyediting, proofing, copywriting, photo research and licensing, production coordination, and blogging. Her specialties include: personal finance for millennials, long-term finance goals, budgeting on a variable income, and small business finance.