Increased Standard Deduction Example 1
on 08/2/2019 at 5:48 am
FACTS: Brad and Susan are married with three dependent children. Brad earns a salary of $310,000, and Susan stays home with their children. Brad and Susan’s itemized deductions typically include $12,000 of mortgage interest, $15,750 of state and local income taxes, and $8,000 of real estate taxes.
Old Law
- Salaries & Wages
- 310,000
- Personal Exemption
- (20,750)
- Itemized Deductions
- (35,750)
- Taxable Income
- 253,500
- x Marginal Rate
- 33%
- Tax Liability
- 58,381
- Child Tax Credit
- —
- Net Tax Liability
- 58,381
New Law
- Salaries & Wages
- 310,000
- Personal Exemption
- —
- Standard Deduction
- (24,000)
- Taxable Income
- 286,000
- x Marginal Rate
- 24%
- Tax Liability
- 57,219
- Child Tax Credit
- (6,000)
- Net Tax Liability
- 51,219
***Disclaimer: This communication is not intended as tax advice, and no tax accountant -client relationship results**
