New tax law

The new tax bill with the $24,000 standard deduction for married couples means that 92% of all taxpayers will file without itemizing deductions. These people will not use the mortgage interest deduction, the state income tax deduction, the property tax deduction, medical expense deduction and charitable deduction. The new law limits the state tax deduction to $10,000. In MN that means your house has a taxable value of $1,500,000. Your mortgage interest deduction is limited to a mortgage of less than $750,000. So how does the family of four earning $100,000 do their taxes. Gross income from W-2’s $100,000 Less the standard deduction 24,000 Taxable income $76,000 Tax due $8,739 Less $4,000 child tax credit $4,000 Tax due $4,739 This means the federal income is 4.7% of gross income. A family with $60,000 of gross income will pay zero income tax. This includes 54% of all taxpayers.