02-19-2019, 07:03 PM
(02-19-2019, 03:09 PM)fredtoast Wrote: And that seems strange because the rates did not go down that much.Thats because the rate that each bracket was reduced does not equal the rate amount that you will save.
But like I said, maybe I am missing something.
Follow this chart
https://www.gpwa.com/wp-content/uploads/2018/01/Individual-and-Corporate-Tax-Rates.pdf
Lets assume that a couple MFJ and made $233,000 in both 2017 and 2018. In 2017 their total tax would be $29,752 and they would be in the 28% bracket (4th bracket).
In 2018, they're still in the 4th bracket (now 24%), but in the middle of it and not the top. For the first 3 brackets they owe $8,907 and another $16,320 for the portion of the 4th bracket that their income falls into. Total tax due for 2018 is $25,227.
Their total savings from 2017 to 2018 is $4525. This represents a 15.2% savings from the previous year even though the percentage drop of their brackets was 0%, 3%, 3%, and 4% respectively.
