IRS data shows drop in income tax liability

The first IRS analysis of a large majority of filings for the 2018 tax year — the first under the Tax Cuts & Jobs Act enacted the previous December — found that taxpayers reporting at least $500,000 in income represented the lone bracket to incur higher tax liabilities in the aggregate.

The wealthiest earners saw their average tax liability decline under the new law, however, not at the same rate as most taxpayers in lower income brackets.

Of earners who generated income in excess of $1 million last year, taxpayers incurred nearly $1.9 billion in additional tax liabilities, an increase of 1.4 percent. But an analysis of the IRS data shows that with an extra 13,100 taxpayers nationally reporting ninefigure income last year compared to the number in 2017, the average tax liability dropped 4.7 percent.

According to the Tax Foundation, the data represents about 80 percent of all filings the IRS will receive this year, reflecting taxpayers who took extensions on submitting their final forms. With fewer than 3.7 million fewer filings in this year’s preliminary data compared to a year ago, the final figures could move the needle in either direction on the IRS calculations on total tax liability.

But assuming no major swings in the final report — the IRS report suggests that many taxpayers saved on their federal income taxes, even if Connecticut and other

highcost states residents lost deductions they had been able to claim in the past for state and local taxes in excess of $10,000, a new threshold set under the new federal law.

From the getgo, the Trump administration’s tax cuts have been derided by critics as a boon for the wealthiest taxpayers and a load on the national debt, with several Democrats in last week’s kickoff presidential debates sugges

ting they would tackle elements of the Tax Cuts & Jobs Act in the upcoming campaign.

But more than half of the tax brackets studied by the IRS had declines in total tax liability of 10 percent from 2017, led by a nearly 15 percent drop for those earning between $40,000 and $50,000. The Census Bureau computed a median U.S. income of more than $61,000 last year.

For the income bracket that includes the Connecticut median income topping $73,000, overall tax liability

Hearst Connecticut Media file photo Residents of Greenwich line up at town hall to pay their municipal taxes in December 2017 on the heels of the passage of the Tax Cuts & Jobs Act of 2017.