Friday, 04 December 2020

New Tax Rates 2018

peterg By peterg | December 27, 2017 | United States

On December 20, 2017 US lawmakers agreed to lower US corporate and personal tax rates. Let’s take a look at the new personal and corporate tax rates to see how they may affect you.

First of all, the top corporate rates have dropped from 35% down to 21%.  

Why Lower Corporate Taxes?

In a word: COMPETITION. The US had one of the highest corporate tax rates in the world. This encouraged corporations to keep profits offshore, which is not good for the US economy. Here is a comparisons before the recent reduction: 

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Personal Tax Rates


The top personal tax rates have dropped from 39.6% down to 37%. 

Singles: 

https://gallery.mailchimp.com/a29dddf7776f6e28b66d2e58e/images/6795bdda-9fd8-4846-9bee-3c80b8157a82.jpg

 

Married Filing Jointly: 

 

https://gallery.mailchimp.com/a29dddf7776f6e28b66d2e58e/images/fc2aeba9-896a-4a7e-b11d-9e9c450a7951.jpg

"Do I have to pay taxes again when I take it out?" 

Answer: "Don't take it out. Borrow it out." 

Example

Want to buy real estate? Why not borrow the money from your corporation? In the above scenario, let's say you have $100,000 of income in the top bracket.

• If paying 52.3% in personal taxes (plus, or including state income taxes) you would only have $47,700 left. 

• If paying 21% corporate taxes you would have $79,000 to invest in real estate by borrowing this money from your corporation. 

• Thus, you have $31,300 more to invest. 


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