How does tax reform impact your paycheck?
BAKERSFIELD, Calif (KBAK/KBFX) —
The GOP tax overhaul is heading to President Donald Trump's desk for signing.
The bill has been highly publicized, but do you know how it will impact your paycheck?
Eyewitness News used U.S. Census Bureau data to construct the average Bakersfield taxpayer.
For our example, we will consider a married couple with one child and an annual household income of $58,000. Under current tax law, this family would need to pay $2,930 in federal income tax.
However, the same family would only need to pay $1,699 in federal income tax under the new tax plan.
This means the average Bakersfield family will save roughly $1,231 in federal income tax each year. Not only will this family pay a lower percentage on their income under the new tax plan, but also the standard deduction is nearly doubling for married couples from $13,000 to $24,000.
The standard deduction is also increasing significantly for single filers from $6,500 to $12,000.
A vast majority of taxpayers use the standard deduction, and the increase offsets some of the deductions and credits lost in the new law.
An example for a single person: Assuming they make $52,000 a year, they would pay about $1,300 less a year in federal income tax.