Tax Foundation Releases Updated MyTaxBurden.org Calculator wtih Expiring Tax Cuts
Interactive Calculator Allows Taxpayers to Compare 2011 Income Tax Liability Under Various Policy ScenariosWashington, DC, August 18, 2010 - The Tax Foundation has updated its interactive calculator at www.MyTaxBurden.org to include the Democrats' plan for the expiring Bush-era tax cuts recently scored by the Joint Committee on Taxation. Now, taxpayers may compare their 2011 federal income tax liabilities under four policy scenarios: (1) All the tax cuts expire completely at the end of this year; (2) All the tax cuts are extended into 2011 or made permanent; (3) President Obama's budget is adopted, which would allow the tax cuts to expire for families making over $250,000 a year (singles making over $200,000), extend some stimulus measures and impose new limitations on itemized deductions; and (4) Congressional Democrats' recent proposal is adopted, which is similar to the Obama plan but does not extend stimulus measures or include additional limits on itemized deductions.
Taxpayers can type in basic information - such as filing status, wage income and number of dependents - along with optional more detailed information - such as capital gains and dividend income, state and local taxes paid and other itemized deductions - and determine what their federal income tax burden would be in 2011.
"Congressional leaders have said they plan to schedule a vote on the fate of the Bush-era tax cuts before the November elections, but for now, the outcome remains uncertain," said Tax Foundation President Scott Hodge. "Regardless of what happens, our tax calculator at MyTaxBurden.org can help give taxpayers a better sense of how these policies will affect them - whether all the Bush tax cuts are extended or just those affecting families earning less than $250,000 a year, or if all the tax cuts expire."
For example, if Congress fails to act to extend the Bush tax cuts, the federal income tax burden for a married couple filing jointly making $80,000 with two children would be $2,137 higher in 2011 than it would be if all the tax cuts are extended or if Congressional Democrats' proposal becomes law.
The calculator also allows for more detailed tax information. For example, consider a married couple making $500,000 with two children; long-term capital gains of $50,000; dividend income of $5,000; other income of $10,000; a state and local income tax deduction of $30,000; $10,000 in real estate taxes paid; and $40,000 in other itemized deductions. Their federal income tax bill would be $14,532 higher in 2011 than it would be if all the tax cuts are extended. Under the Democrats' plan, the family's 2011 federal income tax bill would be $1,348 higher compared to their tax liability if all the cuts are extended.
The calculator at www.MyTaxBurden.org is part of a series answering frequently asked questions about the expiration of the Bush tax cuts, available online at http://www.taxfoundation.org/publications/show/26135.html.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.