How would Obama’s tax plan affect you?

Tax specialists take a look at who would pay more, who would pay less and whose tax bills would be the same.

Who would pay more, less or nothing at all under President Barack Obama’s tax proposals?

For a look at how the changes would affect different families, we
turned to the specialists at Deloitte Tax for estimates. These
estimates do not include Social Security or Medicare taxes, which would
be unchanged for now, or state taxes, which vary nationwide.

Income: $35,000
Status: married, two children under age 17

Difference: $1,200 more from the government

The $400 Making Work Pay tax credit would apply even to households that
paid no income tax or already received payments from the government. An
adjustment to the earned income tax credit for married couples would
mean that a family of four earning $35,000 could receive $4,100 in
income support.

Income: $50,000
Status: single, no children

Difference: $400 less in taxes

The big change for single people earning up to $75,000 would be
receiving $400 from the tax cut in the economic stimulus plan. The
average single person and average family both fall in this range. For
couples earning up to $150,000, the tax cut is $800.

Income: $125,000
Status: single, no children

Difference: $0

The main Obama tax provisions would not affect taxes paid by
individuals earning between $100,000 and $125,000 (or couples earning
between $200,000 and $250,000).

Income: $150,000
Status: married, one child under 17, one in college

Difference: $6,800 less in taxes

Without a fix to the alternative minimum tax, this family might get
hit. In addition to still being eligible for the Making Work Pay
credit, this family could save money from the stimulus plan’s American
Opportunity Tax Credit (.pdf file), a tax break for the cost of higher
education.

Income: $300,000
Status: married, two children under 17

Difference: $1,100 more in taxes

This well-to-do family likely would get hit by the alternative minimum
tax, but less so under Obama’s budget than under current law. It would
still see its taxes rise from an increase in tax rates for those
earning above $250,000 and from new limits on itemized deductions and
personal exemptions.

Income: $500,000
Status: single, no children

Difference: $19,200 more in taxes

The single and very successful would be hit by a hefty increase. The
increased tax rate would cost this person $7,800 more a year. The
restoration of limits on itemized deductions and personal exemptions
would cost $3,200 extra, and the limit on tax benefits for itemized
deductions would total an additional $8,200.

Income: $500,000
Status: married, two children under 17

Difference: $11,300 more in taxes

The doctors next door and their kids currently would get hit by the
alternative minimum tax. The increased tax rates plus limits to
itemized deductions and tax benefits would mean this family could avoid
the AMT. But its taxes still would go up.

Income: $1 million
Status: married, two children under 17

Difference: $53,100 more in taxes

Only about 1% of married people filing jointly have an income this
high, according to the Internal Revenue Service’s Statistics of Income
division. Someone earning $1 million a year would see a big tax
increase under the Obama plan, paying an additional $25,400 from higher
tax rates and an estimated $27,700 from the limitations on itemized
deductions and personal exemptions.

http://articles.moneycentral.msn.com/Taxes/PreparationTips/how-would-obamas-tax-plan-affect-you.aspx