Donald Trump is going to be our next president. One thing Trump promised all along was tax simplification and cuts for the middle class. Earlier today, the good folks at NPR outlined the details of Donald Trump’s tax plan.
My first response of course was to find out how it might affect me. After doing the math, I was surprised to learn that the difference isn’t all that significant for me. Basically, Trump wants to reduce the number of tax brackets from seven down to three. The top bracket will be taxed at 33% versus 40%. Under Trump’s plan, most people will likely end up with an effective tax rate that’s a percent or two lower, but as NPR points out, those who actually will benefit the most are top earners.
I created a handy calculator for you to see how your tax rates could be affected. Simply select your filing status and input your total taxable income (don’t forget to add your bonus). Also, don’t forget to subtract your standard deduction (usually $6,300 if you’re single or $12,600 if you’re married) and any other deductions from your taxable income. After that, the calculator will do all the rest of the work for you!