What is Income Tax?

What Is Income Tax?

Listed below is just a snippet of information from the Tax Cuts and Jobs Act (TCJA) of 2017. Only portions and components are included in this book to make a point about some simplified methods within the new tax code. These new rules will apply to the tax year starting in 2018. The law will be in place until December 31, 2025.

There are two different types of taxes small business owners have to pay. They include self-employment tax and income taxes. Self-employment taxes were discussed in the prior chapter. So, income taxes will be discussed in this chapter.

All working citizens have to pay income taxes. The income tax system has been changed due to the new tax which is called the Tax Cuts and Jobs Act. The new tax changes will have less marginal tax rates with lower percentages within each of the different rates.

The standard deduction for single taxpayers and married individuals filing separately is increasing $200 to be $12,200. For married individuals filing jointly, the increase is $400 increasing to $24,400. The standard deduction for a head of household will be $18,350, a $350 increase.

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RMH Tax & Financial Advisors, Inc.

12805 Highway 55, Suite 412,
Plymouth, MN 55441
T: (763) 557-2818
E: bobh@rmhtax.com


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