Your share of the budget
With NC’s new state budget, everyone should see a bit more of their bank accounts. When it comes to income taxes, anyone who files taxes with a standard deduction will pay less next year, if at all. Each state teacher will receive at least one bonus of $ 2,300 and each state employee will receive at least one bonus of $ 1,000. What’s in it for you? This is the special report of The N&O.
Starting in 2022, state income taxes will go down for everyone due to new budget tax laws that North Carolina lawmakers just passed.
Businesses are the biggest winners, with their income tax rate set to reach 0% by 2029 as part of the new cuts. But ordinary people will also see some benefits. The personal income tax rate will drop from the current 5.25% to 4.99% next year, and will continue to decline gradually over the next few years until reaching 3.99% in 2026 and -of the.
The tax rate cuts will disproportionately help the richest earners. But a different change that lawmakers have also passed, to increase the standard deduction, is aimed at helping low-income people.
The standard deduction is the amount of money a person can earn before they have to start paying taxes. By dropping it from $ 21,500 now to $ 25,500 next year, that means anyone earning less than $ 25,000 will not have to pay income tax at all. And people who earn more than that will now owe a bit less tax, because the higher standard deduction means lower taxable income.
Finally, the new tax laws also increase the deductions that people can take to have children. It applies to families of the lower and middle classes.
Everyone will have different results depending on their marital status, the money they earn and the number of children they have. To see how much money you may owe in taxes next year, enter your data below.
This story was originally published December 1, 2021 6:00 a.m.