16 Comments

    • Total Free Money: $10,350
      Free + 10% Money: $19,625
      Effective Tax Rate: 4.73%
      Grade: A+, plus you’re now the teacher’s pet for submitting your answers first.

  1. ElleX

    Hi! I have a SINK household. I hope I calculated this correctly:
    Standard deduction of $6,300
    Personal exemption of $4,050
    Bracket cap of 10% of $9,275
    Total Free Money: $19,625

  2. Joe

    Family of 4 with 1 in college.

    Standard Deduction: Married Filing Jointly $12,600
    Personal Exemptions: ($4,050 * 4) $16,200
    Credits: (1 Child Tax Credit of $1,000 / .10) $10,000
    (1 American Opportunity Tax Credit of $2500) ($855 / .1 + 1645 / .25) 15,130

    If I did this right – $53,930 of free money !!!

  3. Boyd

    So is this correct?

    Married filing jointly: $12,600
    Personal Exemptions: ($4,050 * 6) $24,300
    Credits: (4 Child Tax Credits of $4,000 / .10) $40,000

    Total Free Money: $76,900

    • Boyd, your math looks good until the child tax credits. You will have $4,000 of tax credits if your children qualify, but it will not yield $40,000 of tax-free income. Instead, it will yield:

      $18,550 (from 10% bracket) + $14,300 (from 15% bracket) = $32,850

      It looks like your magic number will be $69,750 ($12,600 + $24,300 + $32,850). Wow, it looks like I need more kids…Happy New Year! Ed

  4. Tim

    Does this calculatoin consider other write-offs? This is the first year my wife and I are home owners, though not sure that is relevant for this exercise.

  5. shane

    can i see if i do this correctly?

    will be a family of 4 sometime in march

    standard deduction-12,600
    personal exemptions-16,200
    credits-2 child tax credits of 18,550
    total-47,350. i think that’s a bit wrong but i took a shot, lol

    • Shane, your numbers look good until you calculate your tax credits. Your $2,000 of child tax credits take you past the 10%-tax bracket ($18,550 * .10 = $1,855 of federal income tax). You still have $145 of tax credit left that allows for another $967 ($145 / .15) of income before you begin paying tax in the 15%-tax bracket. Here are your numbers by my calculations:

      Standard Decuction: $12,600
      4 Personal Exemptions: $16,200
      2 Child tax credits: ($18,550 + $967)
      Total: $48,317

      Oh yeah and most importantly, congrats on the new addition to your family. Although your entry was a little off and past the submission deadline, I hereby award you full credit for the assignment.
      Thanks for reading, Ed

  6. Luke

    DINK couple. MFJ–no kids!

    Standard Deduction: $12,600
    Personal Exemptions: $8,100
    CREDITS: None

    FREE MONEY: $20,700
    10% tax: 39,250

    Sorry..the 10% part confused me a bit. Did I get that right?

    • Luke, your math looks good to me. Your effective tax rate on $20,700 is 0% and on $39,250 it’s 4.73%. Good numbers to know for sure. Also, look into qualifying for the saver’s credit…you two might be able to get that. Even though it’s six months late, I hereby award you full credit for the assignment.

  7. Keith

    I’m new to calculating taxes, I’ll give it my best shot.

    Standard Deduction: Married Filing Jointly- $12,600
    Personal Exemptions: ($4,050 * 2) $8,100
    10% Money: $18,550 (this is the part that confuses me, it’s just my wife and I, so is it a full 18,550?)

    Total: $39,250

    • Keith, it looks good to me. So, on $39,250 of income you would owe $1,855 of federal income tax. That’s an effective tax rate of 4.73%…that’s good info to know. Good luck working your plan. Grade A- because it’s 7 months late! Ed

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