By JLP | April 8, 2010
Does this income tax example of a family of four making $50,000 per year seem fair to you?
Here’s how they did it, according to Deloitte Tax:
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.
I found that example in this article: Nearly Half of US Households Escape Fed Income Tax
Granted, $50,000 per year isn’t a lot of income for a family of four. Yet, I can’t help but think that this family should be paying at least some federal income taxes.
The startling part of that article is the fact that nearly 50% of U.S. households pay NO FEDERAL INCOME TAX.