Family A: $2,000,000 in Adjusted Gross Income
Family A consists of a husband and wife with three children, ages 12, 15, and 17. The federal adjusted gross income, which is the starting point for the North Carolina tax calculations, is $2,000,000, all from salary. Family A contributes $5,000 to the 529 savings plan for college, purchases school supplies and clothing during the tax-free weekend (amount spent = $900), purchases a service agreement (cost = $700) for a new refrigerator, and the five family members attend 4 Panthers games (ticket price = $400 each), 6 Hornets games (ticket price = 250 each), 4 concerts (ticket price = $700 each), 2 movies (ticket price = $6 each), and one circus performance (ticket price = $120 each). The family files a joint return and itemizes its deductions.
| 2013 | 2015 | |
|---|---|---|
| Federal adjusted gross Income | 2,000,000 | 2,000,000 |
| Deduction for Contribution to saving fund for college (529 plan) | 5,000 | 0 |
| Deduction for small business income | 0 | 0 |
| North Carolina adjusted gross income | 1,995,000 | 2,000,000 |
| Itemized Deductions | 300,000 | 300,000 |
| N.C. personal exemption allowances | 10,000 | 0 |
| N. C. taxable income | 1,685,000 | 1,700,000 |
| N.C. income tax | 129,625 | 99,750 |
| Consumer use tax | 1137.375 | 1148 |
| Income Tax due | 130,762 | 98,898 |
| Credit for children (100 per child) | 0 | 0 |
| Credit for child and dependent care expenses | 0 | 0 |
| N.C. earned income tax credit | 0 | 0 |
| Credit for charitable contributions for non-itemizers | 0 | 0 |
| Net income tax due | 130,762 | 98,898 |
| Sales taxes | ||
| – Service agreement for refrigerator | 0 | 47.25 |
| – School supplies, clothing during tax free weekend | 0 | 60.75 |
| – Tickets for 4 Panthers games | 0 | 540.00 |
| – Tickets for 6 Hornets games | 0 | 506.25 |
| – Tickets for 4 concerts | 0 | 945.00 |
| – Tickets for 2 movies | 0 | 4.05 |
| – Tickets for 1 circus performance | 0 | 40.50 |
| Total Taxes | 130,762 | 101,041.80 |
Thus, Family A will see a drop in its total taxes.
Voting 2016 