What Does the Tax Reform Bill Mean for Low-Income Earners?

Aside from lowering the statutory corporate tax rate from 35% to 21%—perhaps the most well-known facet of the tax plan—this bill lowers several individual rates and makes key changes to the tax code that affect low-income earners.

The tax reform bill does not reduce the number of individual brackets, but it does lower the rates for five of the seven:

Old Tax Brackets

Single Filers		Tax		Filing Jointly		Tax
Over	But not over	%		Over	But not over	%
$0	$9,325	10%		$0	$18,650	10%
$9,325	$37,950	15%		$18,650	$75,900	15%
$37,950	$91,900	25%		$75,900	$153,100	25%
$91,900	$191,650	28%		$153,100	$233,350	28%
$191,650	$416,700	33%		$233,350	$416,700	33%
$416,700	$418,400	35%		$416,700	$470,700	35%
$418,400	–	39.6%		$470,700	–	39.6%

New Tax Brackets

Single Filers		Tax		Filing Jointly		Tax
Over	But not over	%		Over	But not over	%
$0	$9,525	10%		$0	$19,050	10%
$9,525	$38,700	12%		$19,050	$77,400	12%
$38,700	$82,500	22%		$77,400	$165,000	22%
$82,500	$157,500	24%		$165,000	$315,000	24%
$157,500	$200,000	32%		$315,000	$400,000	32%
$200,000	$500,000	35%		$400,000	$600,000	35%
$500,000	–	37%		$600,000	–	37%

Other Important Tax Changes

While personal exemptions are eliminated, the standard deduction is increased from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married filing joint filers. Another change that’s likely to impact low-income taxpayers is the adjustment to family tax credits.
The Child Tax Credit (CTC) is being doubled from $1,000 to $2,000, and the refundable portion will be increased from $1,100 to $1,400, which will likely result in lower-income families seeing CTC-related refund dollars.


Source Drake Taxing Subjects