Can you further explain this to me? I’m still not understanding it.
How much would a married couple tentatively get to deduct for their standard deduction? Is there a personal deduction for each person?
Right now I am figuring we will owe thousands more, because (based on my most probably flawed calculations), we are over the cutoff for the one category by .085%, jumping us up to the next percentage tax bracket.
We have no mortgage or child care or interest.
We’ll be screwed even if the standard deduction goes up to 24k. By a lot.
A married couple, no kids, for 2016 could deduct 20,700 from their adjusted gross income to get to their taxable income. So a person with 50K in wages would have 29,300 in taxable income.
That would mean, for the 2016 tax year, they would owe a tax of 10% for their first 18,550 dollars of income, and 15% on the next 10,750 dollars (which gets them to 29,300 taxable income). So roughly $1855 + $1613 = $3468 in tax owed. IRS table shows $3471...
If they had 2 kids, they would be able to deduct $12,600 + (4 x 4050), or reduce their adjusted gross income down thus:
50,000 - 12,600 - 16,200 = $21,200 taxable income.
The tax would be 10% of 18550 (1855) + 15% of the next $2650 (398) for a total of $2253 in tax. IRS shows 2256.
That would then be reduced by any credits. With 2 kids, they would get $2000 applied against their taxes, and their computed taxes would then be $56. If they had $1056 withheld from their wages, they would get a $1000 refund.