| 1. |
Why are the standard deduction and personal exemption different from my 2009 tax return? |
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Many parameters in the tax code are indexed for inflation, and rise slightly every year. Parameters in 2011 are based on an IRS formula that adjusts tax parameters for inflation based on official numbers from the Bureau of Labor Statistics. |
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| 2. |
Why aren't the boxes for dependents working for me? |
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You must change your filing status to "Married" or "Head of Household" to claim dependents. If something is still not working for you, make sure you are using a modern web browser. We recommend Internet Explorer (7.0+), Firefox (3.0+), or Opera. Webkit-based browsers (Safari and Google Chrome) usually work fine but have been known to occasionally leave some of the right-side output boxes empty - this does not affect the calculation. |
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| 3. |
Why does your calculator show little or no AMT when my actual tax return shows a much larger AMT? |
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AMT depends on a large number of factors and is very sensitive to particular kinds of itemized deductions. Many of these are not things that we ask about - in making this calculator, the Tax Foundation strove to find a reasonable balance between simplicity and accuracy. The two most significant kinds of deductions that affect AMT are the real estate tax deduction and the local income tax deduction, which is why we specifically ask about them. |
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| 4. |
I'm self employed. Is the payroll tax calculation accurate? |
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The social security payroll tax currently falls on employees and employers equally - each party pays 6.2% of the wage amount up to a wage maximum of approximately $108,900, plus 1.45% of all wages. Self employed persons are responsible for both the employer and the employee portion of the tax. They can simply double the listed payroll tax amount for the full expiration and Democratic plan scenarios; for the compromise scenario, the payroll tax cut only applies to the employee portion of the tax, and will have to be calculated by hand. For self-employed persons, the payroll tax on self-employment income under the compromise scenario is 0.104 times the smaller of the income or $108,900, plus an additional 0.029 times total self employment income. |
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| 5. |
Where do I enter the deduction for state sales taxes? |
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This can be entered in the box for the local income tax deduction - they have the same effect. Note that you can choose only one or the other - you cannot deduct both state sales and income taxes. |
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| 6. |
Why don't your numbers line up exactly with my 2009 tax return? |
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The United States tax code is lengthy and complex - the instructions for the Form 1040 alone are 175 pages long. If we wanted to make a calculator that would give you an exact calculation of your tax, we'd have to ask you hundreds of questions about the most arcane details of your finances. Our goal was to make a relatively simple calculator that could give you a reasonable estimate of how the expiration of the Bush Tax Cuts could affect you. For most people, the estimate should be reasonably accurate, but if you have a particularly complicated return, our numbers may depart substantially from reality. |
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| 7. |
What about self-employment tax? |
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Self-employment tax is separate from income tax, however, you can deduct up to one-half of self-employment tax as a business expense. In order to do this accurately, we'd have to add a box for self-employment income, which we chose not to do for simplicity. If you would like to know how to calculate this deduction, see the bottom of this page. |
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| 8. |
How about tax-exempt interest, which affects the taxation of Social Security benefits? |
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It is true that tax-exempt interest, while not directly subject to income tax, does affect the taxation of Social Security benefits. Again, asking more questions like those of tax-exempt interest would require the calculator to be much more complicated. One way around this is to add tax-exempt interest to "other income" and then visually see how much Social Security is being taxed on the right-hand side. Let's call this "Social Security temp." Then, remove the interest from the "other income" box and adjust your Social Security benefits (even if greater than those actually received) until the taxable amount on the right side hits the "Social Security temp" amount viewed in the previous step. |
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| 9. |
Why are you so clearly biased in favor of/against President Obama? You are obviously Democratic/Republican hacks. How do you respond? |
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In programming this calculator we strove for the most accurate estimate possible, based on the best available evidence, and the most up-to-date proposals, and did not make any decisions to include or exclude certain questions or calculations based on how they would affect the outcome. All of our assumptions are publicly available (see the link below) and our calculator is written entirely in client-side Javascript, so anyone who wishes to can view our code and audit our calculation - we have nothing to hide. |
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| 10. |
Do you have a detailed list of the changing parameters and tax rates that you use to make the calculation? |
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Yes! See this page to get a detailed list of parameters that would change under the various scenarios.
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