Increased Standard Deduction Example 2
on 08/2/2019 at 5:52 am
FACTS: Chris and Rachel are married with no children. Chris earns a salary of $200,000, and Rachel earns a salary of $110,000. Chris and Rachel’s itemized deductions typically include $6,000 of mortgage interest, $15,500 of state and local income taxes, and $4,000 of real estate taxes.
Old Law
- Salaries & Wages
- 310,000
- Personal Exemption
- (8,300)
- Itemized Deductions
- (25,500)
- Taxable Income
- 276,200
- x Marginal Rate
- 33%
- Tax Liability
- 65,872
- Child Tax Credit
- —
- Net Tax Liability
- 65,872
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
- —
- Net Tax Liability
- 51,219
***Disclaimer: This communication is not intended as tax advice, and no tax accountant -client relationship results**
