Reality Check: How much will YOUR income taxes go down (or up)?

Here’s a simple online  calculator that rudely awakened me.


My son who admonished me to “stop calling it a tax cut until you run your numbers” … I finally did run my numbers.

For me — a discounted-rate college prof – my Federal income taxes will go up about 30%.

Whoa, Nelly.

What’s going on?

The key drivers: (1) loss of personal exemptions ($4,050 times 2)  (2) non-deductibility of state income taxes (Virginia has turned purple with a Dem governor) and (3) loss of 1/3 of my local real estate taxes (assuming the House version that still allows $10,000).

The alleged reduction in rates doesn’t offset those deductions lost.



If you want to see what the likely impact will be on you, pull out the first couple of pages of your 2016 tax return so you can plug a few numbers into the CALCXML online tax calculator.

Here’s an example for a family of 4 – husband, wife, 2 kids under 18 … filing jointly … $150,000 combined income … no “unearned investment income” (dividends & capital gains which get taxed at a preferential rate) … $500,000 mortgage @ 4% …. $5,000 local real estate taxes .

click for CalcXM’s online tax calculator


And, the answer is …


This family of 4 would pay just over $15,000 in Federal income taxes … about 10% of gross income … 12-1/4% of taxable income.

They can compare to there taxes paid in 2016 … to see if their taxes are going up or down … and develop their own point-of-view as to whether 10% (or 12-1/4%) is a “fair share” rate for them.

click for CalcXM’s online tax calculator


An important takeaway

I was initially bummed when I saw the answer … my income taxes are going to go up.

Then, I took a big step back and remembered: the stock market has been el fuego since Trump’s election … and most analysts forecast another big bump when the corporate tax cuts are finalized.

Translation: my 401-K accounts are looking much, much better these days … just in time for a June retirement.

As the original Grandma Homa used to oft say: The Lord giveth and the Lord taketh away.

In this case the Lord is giving more than she is taking away.


And, her timing is awesome.


Follow on Twitter @KenHoma            >> Latest Posts


2 Responses to “Reality Check: How much will YOUR income taxes go down (or up)?”

  1. Mike Says:

    June retirement??? Say it ain’t so!

  2. John Says:

    Does Obama get the same credit for the 185% growth he created for you during his time, too?

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