At the end of last year, Congress and the President passed sweeping legislation to change the tax system in this country. I will not discuss the politics of this here. I will discuss the impact on my individual financial situation only. This reform included a cut to my individual tax rate from 2018 through 2025. In 2025, the tax rate is scheduled to return to the old levels.
The IRS moved quickly and released withholding tables 2 weeks ago and you can find them here. These tables tell employers how much to withhold from each employee’s paycheck.
I received my first paycheck with the new withholding rates today. The resulting change to my paycheck is an additional $41 in take-home pay each week. With the extra income, I have decided to increase my investing. Starting today and each following week I will contribute the following:
$105 to my IRA (unchanged)
$50 to my brokerage account (up from $25)
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