I am still confused, not at the new tax bracket, but what the calculation for actual tax owed would be in 2018.
Example: 25% Married Filing Separate in 2017 MAGI range of $37,950 to $91,900 = TAX OWED of $5,226.25 plus 25% of the excess over $37,950. Example for someone with MAGI = 75,000 TAX OWED would have been: (75k - 37,950)x 0.25 + $5226.25 = $14,488.75
I understand, had there been NO tax bracket change, 38,700-$93,700 would have been the 2018 25% range and this same example has the same rate in 2018.
BUT with the change in brackets none of the articles I read state that you will have a baseline PLUS the 25% of the excess over whatever the bottom of the bracket is.
SO for the sake of the $75k MAGI example, is the 2018 TAX OWED = $75,000 x 0.25 = $18,750 ??
Meaning the tax bill this year would be 4261.25 higher with the new change?
Example: 25% Married Filing Separate in 2017 MAGI range of $37,950 to $91,900 = TAX OWED of $5,226.25 plus 25% of the excess over $37,950. Example for someone with MAGI = 75,000 TAX OWED would have been: (75k - 37,950)x 0.25 + $5226.25 = $14,488.75
I understand, had there been NO tax bracket change, 38,700-$93,700 would have been the 2018 25% range and this same example has the same rate in 2018.
BUT with the change in brackets none of the articles I read state that you will have a baseline PLUS the 25% of the excess over whatever the bottom of the bracket is.
SO for the sake of the $75k MAGI example, is the 2018 TAX OWED = $75,000 x 0.25 = $18,750 ??
Meaning the tax bill this year would be 4261.25 higher with the new change?