Family E: $55,000 in Adjusted Gross Income

Family E consists of a husband and wife with three children, ages 7, 11, and 12.  The federal adjusted gross income is $55,000, all from salary.  Family E contributes $3,000 to the 529 savings plan for college, purchases an Energy Star rated central air conditioning system during the sales tax holiday at a cost of $4,000, purchases a service agreement (cost = $500) for the central air conditioning unit, purchases school supplies and clothing during the tax-free weekend (amount spent = $600), and the five family members attend 2 Panthers games (ticket price = $80 each), 2 concerts (ticket price = $60 each), and 5 movies (ticket price = $6 each).  The family files a joint return and uses the standard deduction.  Charitable contributions amount to $1,700.

2013 2015
Federal adjusted gross Income 55,000 55,000
Deduction for Contribution to saving fund for college (529 plan) 3,000 0
Deduction for small business income 0 0
North Carolina adjusted gross income 52,000 55,000
Standard Deduction 6,000 15,000
N.C. personal exemption allowances 12,500 0
N. C. taxable income 33,500 40,000
N.C. income tax 2,134 2,300
Consumer use tax 23 27
Income Tax due 2,157 2,320
Credit for children (100 per child) 300 300
Credit for child and dependent care expenses (6000 x .07) 420 0
N.C. earned income tax credit 0 0
Credit for charitable contributions for non-itemizers 42 0
Net income tax due 1,395 2027
Sales taxes
– Energy Star rated central air conditioning system during tax-free weekend 0 270
– Service agreement for Energy Star rated central air 0 33.75
– School supplies, clothing during tax-free weekend 0 40.5
– Tickets for 2 Panthers games 0 54
– Tickets for 2 concerts 0 40.5
– Tickets for 5 movies 0 10.125
Total Taxes 1,395 2,475.88

 

Thus, Family E will see a large increase in its total taxes.

Family F

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