Tax calculator 2.0: How will tax proposals affect your 1040?(Read article summary)
The Tax Policy Center offers a tool to allow people to see how the proposed changes to federal tax policy would affect YOU.
Illustration / Clay Bennett / The Christian Science Monitor / File
The calculator’s popularity and use have more than pleased us but comments and questions induced us to begin updating it almost immediately after its rollout. TC2.0 incorporates three major changes. Now users will be able to:
• Simulate either 2010 or 2011 taxes—compare tax changes against tax law for either year.
• Turn the AMT patch on or off—continue the temporarily higher exemptions for the alternative minimum tax or use their lower permanent values.
• Estimate the impact of tax law changes on five built-in income levels. In addition to incomes approximating the 20th percentile, median, and 80th percentile for each of our six representative households, we’ve added two higher incomes representing the top 1 percent and the top 1/10 percent of each type of household with sources of income and itemized deductions consistent with those incomes.
As before, the calculator lets you choose one of our ready-made examples or create your own taxpayer from scratch and then compare tax bills under three tax policies—full extension of the 2001-03 tax cuts, complete expiration of those cuts, or President Obama’s tax plan.
Since we debuted the calculator in September, more than 60,000 people have run over 165,000 cases and the media have used the calculator to create examples for many tax stories. If you haven’t yet taken it for a test ride, now’s your chance to check it out. If you’re one of the thousands who have already used the calculator to compare policy alternatives, take a look at the new version and let us know what you think.
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