Even though—or maybe because—the government is shut down right now, the Treasury cashed my fourth quarter tax prepayment in record time. At the same time, the 2019 updated tax brackets showed up in my news feed. That’s convenient.
So, I thought I would take a few minutes to provide you with a quick 2019 update to my last post, using the same $600,000 taxable income example. Let’s see what has changed.
Here is how it looks in the new brackets:
|Top of Bracket||Marginal Tax||Tax|
|$6,999||On the first $9.699, you’d pay 10%||$ 970|
|$39,474||On the next $29,775, you’d pay 12%||$ 3,573|
|$84,199||On the next $44,725, you’d pay 22%||$ 9,840|
|$160,725||On the next $76,526, you’d pay 24%||$ 18,366|
|$204,099||On the next $43,374, you’d pay 32%||$ 13,880|
|$510,300||On the next $306,201, you’d pay 35%||$ 107,170|
|Infinity and Beyond||On the last $80,700, you’d pay 37%||$ 33,189|
|Total Tax Paid||$ 186,988|
I find it interesting that, although the brackets have all moved upward a bit to allow for inflation, the total tax payment at $600,000 goes down by $702. At the same time, the amount of tax owed by people in the lowest two brackets actually goes up. Draw your own conclusions.
Of course, I’m not a real tax expert (just a recovering statistician), and there are a lot of ways to lower your overall tax bill if you talk to a professional.Hermann says please like and share!