Monday, February 7, 2011

Taxes under Obama

A comparison of tax bills for 2010, which must be filed this spring, with bills from 2008, the last full year of George W. Bush’s presidency.

■ A married couple with two young children and a combined income of $25,000

Their refund grew by $385 because the Earned Income Tax Credit was made more generous. The credit is refundable, meaning tax filers can receive it even if they didn’t pay any federal taxes.

■ A married couple with two children, including one in college, and a combined income of $50,000

Refund shrank by $500 because in 2008, the family received a $1,500 economic stimulus payment, which was larger than the $800 Making Work Pay credit they received for 2010. Other deductions were more generous in 2010.

■ A single person making $50,000 who paid $2,500 in interest on a student loan

Tax bill was reduced by $63 because the standard deduction and personal exemption increased. They increase most years, based on inflation.

■ A married couple with two children, including one in college, with modest investments and a combined income of $200,000

Tax bill reduced by $780 because the family had $37,000 in itemized deductions for state and local income taxes, mortgage interest, and charitable donations. Limits on such deductions were phased out.

■ A married couple with two children in college, larger investments, and a combined income of $1 million

Tax bill reduced by $6,740 because the family had $110,000 in itemized deductions for state and local income taxes, mortgage interest, and charitable donations. Limits on such deductions were phased out.

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