NEW YORK, SEPTEMBER 14, 2017 – A Thomson Reuters special report, Projected 2018 Inflation-Adjusted Tax Brackets and Other Key Figures, demonstrates that tax brackets will be adjusted upward in 2018, easing the tax burden slightly for many taxpayers. The adjustments prevent the loss of tax benefits due solely to inflation.
The report provides a detailed projection of inflation-adjusted income tax brackets, standard deduction and exemption amounts, and many other tax items for 2018 to equip professionals, their clients, and compliance software developers with the information needed for tax planning and preparation.
The report, which is based on calculations derived from the most recent Consumer Price Index data published by the Bureau of Labor Statistics, released on September 14, 2017, includes projections for income tax rate schedules for single filers, married filing jointly, married filing separately, head of household and surviving spouses, taxable income brackets for estates and trusts, and standard deductions.
“With the strong possibility of tax reform―and the accompanying uncertainties as to what such legislation may encompass―it may be especially difficult to plan for the 2018 tax year,” said Salim Sunderji, managing director, Checkpoint, with the Thomson Reuters Tax & Accounting business. “What is certain is that tax practitioners not only need to stay on top of potential changes but also must know where their clients will stand under current law. With the projections in this report, practitioners have a clearer picture of what 2018 may bring and can begin strategizing in earnest.”
According to the report, the minimum gross income thresholds for filing in 2018 have gone up. They are based on the basic standard deduction and the exemption amounts, all of which will increase in 2018. Also notable is the starting point for the phasing out of taxpayers’ personal exemptions, ranging from $320,000 for spouses filing jointly/surviving spouses and $293,350 for heads of household to $266,700 for single taxpayers.
The same higher dollar thresholds will apply to the phaseout of itemized deductions. That’s compared to this year, when phaseouts began at $313,800 of adjusted gross income for joint filers, $287,650 for heads of household, and $261,500 for singles. The higher phaseout levels prevent inflation from eating into the value of these deductions.
The free report is available for download on the Thomson Reuters Tax & Accounting website here.