Taxes

Tax in USA

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The rates of taxation in the united states for individuals

Tax in USA. The taxation regime in the United States has also been revisited with regard to individuals. The changes affecting individuals, unlike the corporate ones, are temporary and will expire at the end of 2025.

The tax brackets remain seven, given that the House’s proposal to reduce them to four has not been approved. Except for the lowest and the penultimate, which do not change, the others go down even if in percentages and with different brackets as can be seen from the following tables.

Table no. 1 – taxation in the usa of individuals

IncomeIncome Rates to 2017 from 2026Rates 2018/2025
$ 1 to $ 9,52510%10%
$ 9,526 to $ 38,70015%12%
$ 38,701 to $ 82,50025%22%
$ 82,501 to $ 157,50028%24%
$ 157,501 to $ 200,00033%32%
$ 200,001 to $ 500,00035%35%
+ $ 500,00039.6%37%

Table no. 2 – US taxation of spouses – separate taxation

IncomeIncome Rates to 2017 from 2026Rates 2018/2025
$ 1 to $ 9,52510%10%
$ 9,526 to $ 38,70015%12%
$ 38,701 to $ 82,50025%22%
$ 82,501 to $ 157,50028%24%
$ 157,501 to $ 200,00033%32%
$ 200,001 to $ 500,00035%35%
+ $ 300,00039.6%37%

Table no. 3 – spouses – joint taxation

IncomeIncome Rates to 2017 from 2026Rates 2018/2025
$ 1 to $ 19,05010%10%
$ 19,051 to $ 77,40015%12%
$ 77,401 to $ 165,00025%22%
$ 165,001 to $ 315,00028%24%
$ 315,001 to $ 400,00033%32%
$ 400,001 to $ 600,00035%35%
+ $ 600,00039.6%37%

Table no. 4 – head of the family

IncomeRates 2017Rates 2018
$ 1 to $ 13,35010%10%
$ 13,351 to $ 50,80015%12%
$ 50,801 to $ 131,20025%22%
$ 131,201 to $ 212,50028%24%
$ 212,501 to $ 416,70033%32%
$ 416,701 to $ 444,50035%35%
+ $ 444,50039.6%37%

One major change for individuals is the doubling of standard or lump sum deductions for both single individuals and families.

From January 1, 2018, they go from $ 12,000 to $ 24,000 for couples filing a joint declaration, from $ 6,500 to $ 12,000 for singles and married couples with separate taxation, and finally from $ 9,550 to $ 18,000 for the boss. family.

For completeness of information and greater clarity, I recall that in the American tax system there are different types of deductions.

Tax Deductions in the US Tax System

Payments made during the year for supplementary pensions, health insurance, expenses related to business activities or interest on loans for study purposes reduce the gross taxable income (Gross Income).

The adjusted gross income (AGI) is then subtracted from the flat rate deductions (Personal Exemptions) equal, for 2018, to $ 4,150 for the taxpayer, the spouse and for each dependent person.

These deductions have been suspended for the period 2018-2025.

On the income thus reduced, according to the taxpayer’s choice, further deductions can be recognized: standard (Standard Deductions) or analytical (Itemized Deductions).

The former are recognized in a fixed amount established each year. Their value is conditioned by the type of declaration and is increased in the case of specific personal conditions or those of the spouse. For example, if you are over 65 and blind. The second, however, concern medical expenses, commissions on mortgages, etc.

Deduction for Dependent Child

The Child Tax Credit, or the deduction for the dependent child, as long as they are under the age of 17, has been doubled to $ 2,000, from $ 1,000 previously.

The first $ 1,400 is fully refundable, while the non-refundable $ 500 can be used for the so-called qualifying dependents. That is, dependent family members and other subjects who meet the requirements established by the IRS.

The credit is eliminated or reduced, by $ 50 for every $ 1,000, in cases where the adjusted taxable income (AGI) exceeds certain thresholds.

The latter have also been subject to a profound rectification. And indeed, for singles, the new threshold is $ 200,000, up from $ 75,000 previously. While for married couples making a joint declaration, it is $ 400,000, up from $ 110,000 previously.

Inheritance tax

The deductible for inheritance tax has also doubled, from the current $ 5.49 million for singles and from $ 10.98 million for married couples, to $ 11.2 million for one and $ 22.4 million for the other.

Let’s assume that Tizio, an American citizen and single, dies in 2018 leaving a legacy of $ 10 million.

Well, under the reform, his inheritance tax will be $ 0, while if he were deceased in 2017, it would have been $ 1,804,000.

The Statistics Department Population Division of the Bureau of the Census, analyzing 2017, estimated that about 11,300 succession declarations will be sent, of which just 5,500 will be subject to taxation. There is no doubt, therefore, that the modification is to the total advantage of the American rich class, given that the wealthiest 10% of the population is the taxable person of 87.8% of the tax.

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