The new tax breaks allowed under The One Big Beautiful Bill Act (OBBBA) open up some intriguing ways for middle class families to pay no federal income at all. The Wall Street Journal reported these this morning. Details on these cases include…
1 – Married Couple With Two Kids earning $100K
$100,000 Wages including overtime
6,800 Less: 401(K) Contribution
6,800 Health Insurance Premium
1,260 Health FSA
3,000 Dependent Care FSA
$40,640 Taxable Income
$4,400 Tax
4,400 Less: Child tax Credit Two Children
-0- Federal Tax Owed
2 – Single Waitress With One Child
$46,500 Wages
12,000 Tips
930 Less: IRA Contribution
23,625 Standard Deduction
12,000 Tip Deduction
$21,945 Adjusted Gross Income
93 Saver’s Credit
2,200 Child Tax Credit
-0- Federal Tax Owed
3 – Married Senior Couple
$26,000 Pension Income
8,000 Part-time Wages
2,500 Interest
12,000 Social Security
25,000 Long Term Cap Gains
25,000 Qualified Dividends
98,500 Total Income
1,800 Less: Non Taxable Social Security
34,700 Standard Deduction
12,000 Senior Deduction
50,000 Zero Income Tax Rate On Gains And Qualified Dividends
-0- Federal Tax Owed
Let me leave you with this…
Aren’t these examples intriguing?
Most of these tax law changes are retroactive to 2025. As such, if any of these cases are similar to yours, you might want to alter the Federal Withholding taxes being removed from your W-2 now.
Please remember that these changes will not alter your Social Security, Medicare, or State Tax Income Tax Liabilities. OBBBA did not change these.
It should also be noted that this doesn’t take into account one of the largest changes that will affect many of you which is the increase in the State and Local Tax Limitation from $10,000 to $40,000. This may add to income tax refunds as well.
If you have any questions, you know my number…
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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