16 Comments

  1. My only free money comes in the form of the standard deduction (I actually itemize since state and local taxes are so dang high in NYC) and personal exemption. So $10,350 for me…

    • 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.

  2. 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

    • Total Free Money: $10,350
      Free + 10% Money: $19,625
      Effective Tax Rate: 4.73%
      It’s always good to know your breakpoints, right? Grade: A+

  3. 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 !!!

  4. 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

  5. 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.

  6. 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

  7. 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.

  8. 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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