Article Date:
March 2018


Word Count:
1840

 

 

Tax Reform Does Much to Help Your Rental Real Estate


If you own rental real estate, the new Tax Cuts and Jobs Act (TCJA) has favorable changes that you need to know about. Here’s the story.

 

Lower Ordinary Income Tax Rates for 2018-2025

 

If you own property as an individual or via a pass-through entity (partnership, LLC treated as a partnership for tax purposes, or S corporation), net income from rental properties is taxed at your personal federal income tax rates. Here are the 2018 ordinary income rates and brackets under the TCJA.

 

 

Single

Joint

HOH*

10% tax bracket

$ 0 to 9,525

$ 0 to 19,050

$ 0 to 13,600

Beginning of 12% bracket

9,526

19,051

13,601

Beginning of 22% bracket

38,701

77,401

51,801

Beginning of 24% bracket

82,501

165,001

82,501

Beginning of 32% bracket

157,501

315,001

157,501

Beginning of 35% bracket

200,001

400,001

200,001

Beginning of 37% bracket

500,001

600,001

500,001

*Head of household

 

 

 

 

You will probably come out ahead under the new law, but if you were in the 33 percent marginal tax bracket for 2017, you could be in the 35 percent marginal bracket for 2018. That unfavorable news mainly affects singles and heads of households with 2018 taxable income in the $200,000-$400,000 range. If you’re in that category, the lower rates on income below $200,000 will offset some or all ... Log in to view full article.

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