Lower Tax Rates
Updated: Apr 14, 2020
While there are still seven tax brackets, the number of them have been reduced. For example, the top tax rate is 37% (down from 39.6%). Overall, this means a lower tax bill for many individuals. It won't work out favorably for all, however. Take this example: The old ceiling for the 28% tax rate was $191,650 for a single filer. That 28% bracket is now gone and a single filer at that income level is now in the 32% bracket.
Regarding investment income, the rates that apply to long-term capital gains and qualified dividends are unchanged. However, the breakpoints at which the zero-rate, 15%, and 20% rate apply have been modified somewhat.