Tax increases for some
Tax increases for some
Using the actual 2016 1040 instructions for singles not itemizing:
Standard deduction = $6300
Personal exemption= $4050
Total: $10350
Taxable income rate= 10% up to $9299 taxable income, then 15% marginal tax rate
If someone earned $19649, about 9.50 an hour full-time, 2016 federal income tax was $928.
Under Trump’s plan (so far):
Standard deduction= $12000
No personal exemption
Total: $12000
Taxable income rate= starting at 12%, presuming it at least goes up to total earnings of $19649.
Taxable income would be 7649.
At 12% tax, this would be $918 federal income tax.
What about seniors? In 2016:
Standard deduction= $7850
Personal exemption= $4050
Total: $11900
If total income (after SS/pension/Roth exclusions) was $19649, taxable income would be $7749.
At 10% tax, this was $773 federal income tax.
Under Trump’s plan (so far):
Standard deduction= $12000
No age addition
No personal exemption
Total: $12000
Taxable income rate= starting at 12%, presuming it at least goes up to total earnings of $19649.
Taxable income would be $7649.
At 12% tax, this would be $918 federal income tax, a $145 increase.
Want to prepare senior citizens for the sticker shock? Get them to withhold more from their pensions?
Or call your congresscritter first?
What about those at lower incomes?
Let’s look at $12000 a year (30 hours/week at a McJob).
2016 total exemption: $10350
Taxable income: $1650
Tax table federal tax= $166
Under Trump’s plan:
Total exemption= $12000
No federal tax
So there is a diminishing tax cut the higher adjusted gross income is.
For the under-65s.
For single senior citizens:
Adjusted gross income= $12000
2016 total exemptions= $11900
Taxable income= $100
2016 Tax table tax= $11
Under Trump’s plan:
No federal income tax
But this “benefit” for single seniors erodes with increasing AGI.
Adjusted gross income= $12600
Taxable income= $700
2016 tax= $71
Trump’s plan:
Taxable income= $600
12% rate= $72 federal income tax
((Mad yet?))
AND with the higher standard deduction, what about being able to claim medical expenses on Schedule A? If they let those still be deductible beyond the 10% of AGI/ 7.5% for seniors… With no deductions for house tax, state tax, etc.?
