Many lawmakers in Washington D.C. are celebrating after passing a new tax law that will take effect in 2018. What does this new law mean for Connecticut residents? How exactly did the federal income tax brackets change?
Filing income taxes has been complicated and confusing for numerous individuals for many years. Mistakes are often made simply because of how difficult the laws have been to understand. Lawmakers pushed for tax reform to make it easier for tax-paying individuals to file quickly and error-free. This new law may not have made things easier to understand or eliminate any of the tax brackets, but it did make changes that will affect how much some individuals have to pay every year.
There are still seven tax brackets listed for both individuals and married couples filing jointly. The change comes with the percentage rate at which individuals and couples are taxed based on their income levels. Each bracket was lowered roughly 3 percent and the income requirements adjusted a bit. The standard deduction was increased -- in fact it nearly doubled -- which will reduce the number of people able to itemize their deductions. The child tax credit was increased.
So, what does this mean for Connecticut residents? Not much, yet. These changes should not affect 2017 income tax filings. They may make a difference when it comes time to file 2018 taxes, though. In the meantime, those who have questions or concerns about the new tax law and how it will affect them going forward can talk things out with an experienced tax law attorney.
Source: Forbes, "The New 2018 Federal Income Tax Brackets & Rates", Rob Berger, Dec. 17, 2017