2018 Federal Tax Brackets

What changed in 2018

2018 was the inaugural year of the Tax Cuts and Jobs Act bracket structure - the largest individual income tax overhaul since the Tax Reform Act of 1986. The 7-bracket schedule shifted from the pre-TCJA 10/15/25/28/33/35/39.6% structure to the new 10/12/22/24/32/35/37% schedule. The standard deduction nearly doubled overnight, from $6,500 / $13,000 in 2017 to $12,000 / $24,000 in 2018. Personal exemptions ($4,050 per person in 2017) were eliminated entirely. The 37% bracket began at $500,000 single / $600,000 MFJ. The new $10,000 SALT cap reduced deductions for high-tax-state homeowners - a major structural change that disproportionately affected New Jersey, New York, California, Connecticut, and Massachusetts filers. The new 20% Qualified Business Income deduction (Section 199A) created a pathway for pass-through small businesses to reduce taxable income, with phase-outs above $157,500 single / $315,000 MFJ. For a married couple with $100,000 taxable income, 2018 federal income tax was approximately $13,879, an effective rate of 13.88% - materially below the same income's 2017 effective rate of about 16.5% under the prior bracket structure with personal exemptions netted out.