The $6,000 Question

How much is the tax bill that goes before the Senate today worth to you? Current estimates are the Middle Class Tax Cut of of 2010, in its current form, will cost the US Treasury about $858 billion. Based on my quick estimate,  if you are one of the 143 million people expected to file tax returns next year it works out to about $6,000 per return. 

This oversimplified calculation can be widely different depending on everyones individual circumstances, BUT, Ã‚ $6k isnt very far off from what we are seeing as we prepare year end tax projections for our business accounting clients. Our average closely held business client shows about $80,000 to $140,000 in taxable income and the alternative minimum tax relief alone (AMT) for these folks usually runs around $2,000 to $4,000. Factor in some of the extensions for lower tax brackets, higher education credits, and child tax credits and the $6000 estimate is quite plausible.

Thanks to the moderator of the Louisian Society of CPA’s round table discussion group, Gerry Schreiber, CPA for the following comparison. The left column shows the provisions being debated today and the right column shows the original proposals from earler this month. Tax Act Comparison

Hopefully next week’s blog will deliver some good news about the acts passage. Maybe everyone can ask Santa for this as a Christmas present just to be sure.