Key components of Tax Bill

So what is in the tax bill and does any of it effect retirement plans?  The short answer is that retirement plans were not directly effected by the tax bill.  That being said, there are a few items which indirectly touch on retirement and whether and to what amount you should participate.  We will cover this over our next few posts but let’s start with the basics, what are the new marginal tax rates:

Current Marginal Tax Rate Proposed Marginal Tax Rate Income Level (Single Filers) Income Level (Couples Filing Jointly)
10% 10% $0 — $9,525 $0 — $19,050
15% 12% $9,525 — $38,700 $19,050 — $77,400
25% 22% $38,700 — $82,500 $77,400 — $165,000
28% 24% $82,500 — $157,500 $165,000 — $315,000
33% 32% $157,500 — $200,000 $315,000 — $400,000
35% 35% $200,000 — $500,000 $400,000 — $600,000
39.60% 37% $500,000 and up $600,000 and up

These amounts will be relevant when you decide whether to participate in your plan and also if your plan offers a Roth provision, whether to utilize it or the traditional pre-tax deferral.