Tax Day Woes? Here's How Your Taxes Will Change in 2018 Because of Trump's Cuts

President Donald Trump marked Tax Day by tweeting about his tax cuts for much of the morning. "So many people are seeing the benefits of the Tax Cut Bill. Everyone is talking, really nice to see!" he wrote Tuesday.

But while most Americans should be seeing the changes in their paychecks, they shouldn't expect to see any real differences when they file this year. The real impact won't arrive until next tax season.

In fiscal year 2018, the Tax Cuts and Jobs Act will cut taxes by about $135 billion, and nearly double that amount in the 2019 fiscal year, boosting paychecks in the short term, according to the congressional Joint Committee on Taxation. The cuts will also boost gross domestic product, says the nonpartisan Congressional Budget Office, but much of that boost will go offshore to foreigners. Additionally, the tax plan will increase U.S. debt by about $1.9 trillion.

Domestically, the benefits of the tax plan are tilted toward Americans with higher incomes. The top 20 percent in terms of income distribution will receive an average cut of more than $7,600 each year, while the bottom 20 percent will benefit by about $60 each year, according to the nonpartisan Tax Policy Center.

Meanwhile, Republicans are using Tax Day as a way to publicize their cuts. House Speaker Paul Ryan wrote, "This is the last tax day under the old code—a system full of hassle and riddled with loopholes for the well-connected. When you file your taxes next year, that won't be the case."

Taxes will be simplified for taxpayers with high incomes, but those with lower incomes probably won't notice a difference.

The standard deduction, or what taxpayers are allowed to subtract from income before figuring out how much tax they owe, will double next year, meaning that a significant portion of the 30 percent of taxpayers who itemize their taxes will no longer have to. This likely won't impact low-income taxpayers, however, as they don't earn enough and typically don't own big-ticket items like expensive homes, which allow itemizing to add up to more than the standard deduction.

A portion of the 45 million taxpayers who itemize their deductions will now be able to take the standard deduction, making filing easier. In 2018, the standard deduction will nearly double, becoming $12,000 for single filers, $18,000 for heads of households and $24,000 for joint filers. The alternative minimum tax, a tax that some upper middle class and wealthy households have to pay, will have loosened requirements.

This tool from the Urban Institute and Brookings Institution's Tax Policy Center allows taxpayers to see how their paychecks and returns will change next year. Below are charts that spell out exactly how your taxes will change.

2018 tax rate
Data provided by the IRS. Newsweek
tax rate 2017
Data provided by IRS. Newsweek

Tables for income tax withholding by CNBC.com on Scribd

Tax Day Woes? Here's How Your Taxes Will Change in 2018 Because of Trump's Cuts | U.S.
{{label}}
{{title}}
EDITOR'S PICK