A Super Summary


Curtis D. Stoltzfus, CAP®, CFP®, VP Financial Strategies


The major tax reform in the Tax Cuts and Jobs Act (TCJA) was championed by one of Conservatives’ favorite superheroes:


Captain Tax Slayer! Over


NEW TAX BRACKETS


Thanks to the “heroic” efforts of Captain Tax Slayer, the new tax


brackets will be 10%, 12%, 22%, 24%, 32%, 35%, and a top rate of 37%, and will remain in


place until the end of 2025, when they will sunset.


These new TCJA tax brackets will produce a reduction in marginal tax brackets for virtually all taxpayers.


SINGLE -


9,525


38,700 82,500


157,500 200,000 500,000


2018 TAX RATE SCHEDULE But Not Over


Amount 9,525


38,700 82,500


157,500 200,000 500,000 --


19,050 77,400


165,000 315,000 400,000 600,000


19,050 77,400


952.50


4,453.50 14,089.50 32,089.50 45,689.50 150,689.50


MARRIED FILING JOINTLY -


165,000 315,000 400,000 600,000 --


1,905.00 8,907.00 28,179.00 64,179.00 91,379.00 161,379.00


Plus


+ + + + + + +


+ + + + + + +


Marginal Tax Rate


10.0 12.0 22.0 24.0 32.0 35.0 37.0


10.0 12.0 22.0 24.0 32.0 35.0 37.0


Amount Over 9,525


38,700 82,500


157,500 200,000 500,000


19,050 77,400


165,000 315,000 400,000 600,000


hen it came to Capital Gains and Qualified Dividend


tax rates, our superhero was not as successful. Unlike ordinary income tax rates, capital gains and qualified dividend tax rates are remaining the same. The thresholds for the 0%, 15%, and 20% long-term capital gains and qualified dividend rates are based on the old thresholds for the individual tax brackets: those who fall in the old 10% and 15% ordinary income brackets get 0% rates, while income in the old 25%, 28%, 33%, or 35% brackets gets the 15% capital gains rate, and income in the former top 39.6% bracket gets the 20% preferential rate. (In addition, the 3.8% Medicare surtax on Net Investment Income also remains, producing a maximum effective rate of 23.8%.) As a result, preferential capital gains and qualified dividend rates will no longer line up cleanly with the ordinary income tax brackets.


14 • Ambassador Advisors


Tax Rate Single


Long-Term Capital Gains & Qualified Dividends Tax Rates Based on Taxable Income 0%


15% Married Joint


< 38,600 38,600-425,800 < 77,200 77,200-479,000


20%


> 425,800 > 479,000


CAPITAL GAINS AND QUALIFIED DIVIDENDS


RETAIN OLD THRESHOLDS


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