Since getting married in June, Ted and Casey had been living in Ted’s rented, 800 sq. foot apartment with their black lab, Tex. While space was a bit tight, they knew living in the apartment was only temporary. After months of searching for their first home, Ted and Casey finally found it—a three-bedroom, two-bath house in a family-friendly Long Island neighborhood with a decent-sized backyard for Tex to run around in. While they need to make a few updates, like replacing the Pepto-Bismol pink toilet and tile in the upstairs bathroom, it’s the perfect house to start their family.
Ted is a history teacher at the local high school, while Casey works as a sales representative for a building supply company. They plan on having kids, but Ted and Casey want to wait a couple of years so they can be in a better spot financially. Combined, they make $115,000 per year. With their new house, Ted and Casey will have to pay $8,400 in mortgage interest and $6,900 in state and local property taxes (New York is a high-tax state) each year.
The Tax Cuts and Jobs Act will provide Ted and Casey with more support now and in the future. With lower tax rates, a nearly doubled standard deduction, and the new Family Flexibility Credit, their tax bill will go from $12,180 to $11,050. That’s a federal tax cut of $1,130. In addition, Ted and Casey will also see tax relief for their mortgage interest credit and state and local property taxes, all without having to itemize their deductions. The money they save each year will help them achieve that financial security they need. And, when they do start having children, Ted and Casey can take advantage of the increased Child Tax Credit—$1,600 per child. Our tax bill helps families like Ted and Casey not only keep more of their money, but allow them to save for the future.