Family of Four Making $59,000 Per Year
• Steve and Melinda have two children in middle school and are living secure middle-class life – but budgets are tight. With tax reform, they’ll get some much-needed breathing room financially.
• As a result of lower tax rates, a significantly larger standard deduction, and an enhanced Child Tax Credit and Family Flexibility Credit, Steve and Melinda will pay over $1,182 less in taxes than last year, reducing their total tax bill from $1,582 to only $400. That’s more money they can use for whatever is important to them, whether it’s paying bills, purchasing a new refrigerator, or putting away savings for the future.
Single Mother Making $30,000 Per Year
• Cindy has a fulfilling job and a promising career path as an assistant manager at a local restaurant. She works hard to support herself and her 11-year-old daughter, but most days Cindy feels like she’s barely getting by much less getting ahead. With the Tax Cuts and Jobs Act, relief is in sight.
• Come Tax Day, Cindy will receive a tax refund of more than $1,000 as a result of the bill’s lower tax rates, larger Child Tax Credit, and Family Flexibility Credit. This is more than $700 larger than the refund she receives today, offering a more meaningful reward for her hard work as she raises her daughter and pursues her own professional aspirations.
Firefighter Making $48,000 Per Year
• Alan is a young firefighter in the community he has called home his entire life. He enjoys the job and has chosen it as his profession just like his father and grandfather did before him. The Tax Cuts and Jobs Act will allow him to see even greater reward for his hard and selfless work.
• Under this legislation, Alan will pay a top marginal tax rate of just 12% instead of the 25% top rate he pays today. Additionally, he’ll see nearly double the amount of his paycheck protected from taxes because the bill significantly increases the individual standard deduction from $6,350 today to $12,000. In the end, Alan will see his total tax bill go down from $5,173 currently to just $3,872 – a total tax cut of $1,301.
New Homeowners Making $115,000 Per Year in a High Tax State
• John and Rebecca got married this past summer and just bought their first home. Today, they make a combined income of $115,000. They will pay $8,400 in mortgage interest and $6,900 in state and local property taxes. John and Rebecca would like to have children, but they’re not sure if now is the right time financially. Under the Tax Cuts and Jobs Act, they’ll receive more support now and into the future.
• The bill reduces their tax bill from $12,180 to $11,050 – a total tax cut of $1,130. This results from lower tax rates, a significantly larger standard deduction, and the addition of the new Family Flexibility Credit. With these benefits, John and Rebecca will also see tax relief for both their mortgage interest and state and local property taxes – all without having to itemize deductions.
• Finally, if John and Rebecca do have a child, they would be able to claim an increased Child Tax Credit of $1,600 – up from just $1,000 today – reducing their taxes even further so they can keep more money to support their new family.