How A Family Of Four Making $50k Can Pay Zero Income Taxes
Interesting article out recently on the tax data coming in for this year. The article discusses how 50% of American households will pay zero federal income taxes this year. Depending on your point of view, this might be a good or bad thing.
The most interesting part of the article is at the end describing exactly how a family of four making $50,000 can pay zero income taxes.
The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.
With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.
The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.
What an odd and ridiculous tax code we have. Why don’t we just go to a freaking flat tax for crying out loud?