The Tax Cuts and Jobs Act has changed the individual income tax rate structure. For tax years beginning after December 31, 2017, and before January 1, 2026, taxable income will be subject to the seven tax brackets described below, taxed at 10%, 12%, 22%, 24%, 32%, 35%, and 37% marginal tax rates. The tax brackets described below are the Federal Income Tax Rates for 2018. The income levels will be annually indexed for inflation.
Barring further legislation, the new tax rates and brackets will expire (sunset) after 2025 and the rates and brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) will once again be in place under the pre-Tax Cuts and Jobs Act law. The new income tax brackets will lower tax rates for many income levels, but due to various other changes (standard deduction increase, suspension of personal exemptions, tax credit changes, etc.) the actual impact on households may increase or decrease.