If you want to know everything about the 2017 Tax Cuts and Jobs Act Bill you can read it here. Have fun. The 560 pages of legislation are as hard to sort out as a truckload of loose hangers.
Let’s face it; what we really just want to know is the bottom line. Let’s just cut to what we’re chasing here – am I going to save money or not? To get an idea (emphasis on Idea) of what might be in store for us, we’re turning to a few news sites offering quick online calculators to help folks get an … idea.
Disclaimer: You should never, ever, ever (to infinity) take financial advice or make plans for your money based on what an outdoor enthusiast/part-time writer has to say. Are we clear on that?
But a lot of people are clicking these links to see what they might save and so I thought we’d give them a spin together to see what they have to tell us.
We’ll test three scenarios that could represent the Dexter area:
- 1. Married with two children, filing jointly, taxable income $100,000 (representing an approximate median income across the Dexter area).
- 2. Married with two children, filing jointly, taxable income $201,000 (for a sample of those above the median income).
- 3. Married with two children, filing jointly, taxable income $50,000 (a representation below median income for the Dexter area).
- 4. Single with no children, filing singly, taxable income $35,000 (to represent a young professional recently graduated from college).
First, The New York Times calculator found here.
This calculator gives you the choice of the standard deduction or itemizing. For our purposes, I chose the standard deduction (which is increased under the new bill). Listed is the tax savings for 2018. Savings for each scenario are:
- Scenario 1: $3,340
- Scenario 2: $9,060
- Scenario 3: $1,420
- Scenario 4: $760
Second, the Tax Plan Calculator by Maxim Lott found here.
This one also asks if you itemize (we’ll say “no”). It also asks how much you pay in property taxes (we’ll say $5,000 and $500 for single). Savings are:
- Scenario 1: $2,868
- Scenario 2: $7,556
- Scenario 3: $1,368
- Scenario 4: $607
Third, the CNN calculator found here.
The CNN calculator doesn’t give you an amount but rather the percentage by which your after tax income will increase.
- Scenario 1: 3.8%
- Scenario 2: 3.7%
- Scenario 3: 4.9%
- Scenario 4: 2.1%
The first three scenarios are comparing apples to apples: Income filing jointly with 2 children. According to CNN’s calculator, the highest incomes get smaller tax cuts percentage-wise.
Scenario 4 is a hamburger being compared to three apples. If you use the CNN calculator to look at higher incomes, you’ll find the tax cut diminishes as income increases.
Now don’t go running up the credit cards in an anticipation of a large tax return.
Pretend this is the part of any such presentations where there is about six inches of disclaimers typed in 1 pt font saying things like actual tax returns will be affected by a person’s charitable giving, actual income and deductions, number of dependents, etc. etc. etc….always consult a professional before making any financial decisions.
Again, this comparison is hardly scientific, just showing the differences between different scenarios here in the Dexter area when using these calculators.