New and Improved Tax Calculator 2.0

Since we debuted our tax calculator in September, more than 60,000 people have run over 165,000 cases, and the media have used the calculator to create examples for many tax stories. Users like both its ready-made cases and the flexibility of creating different examples.

In response to comments and questions, we have updated the calculator and rolled out a new version last week. Tax Calculator 2.0 incorporates three major changes:

• You can simulate either 2010 or 2011 taxes and compare tax changes against tax law for either year
• You can turn the AMT patch on or off to continue the temporarily higher exemptions for the alternative minimum tax or use their lower permanent values.
• You can pick any of five built-in income levels. In addition to incomes approximating the 20th percentile, median, and 80th percentile for each of our six representative households, we’ve added two higher incomes representing the top 1 percent and the top 1/10 percent of each type of household with sources of income and itemized deductions consistent with those incomes.

As before, the calculator lets you choose one of our ready-made examples or create your own taxpayer from scratch and then compare tax bills under three tax policies—full extension of the 2001-03 tax cuts, complete expiration of those cuts, or President Obama’s tax plan.

If you haven’t yet taken the calculator for a test ride, now’s your chance to check it out. If you’re one of the thousands who have already used the calculator to compare policy alternatives, take a look at the new version and let us know what you think.