Credit Karma Tax, offering a premium tax product that never charges members to file, today announced the results of a new study showing Americans could owe $430 billion less in federal taxes this season as a result of the Tax Cuts and Jobs Act.
The analysis used self-reported annual household income and status (single or married) entered into Credit Karma’s Tax Reform Impact Tool to determine that 94 percent of members who inputted their information may see their 2018 federal tax obligation go down. Further, the data shows Credit Karma members who inputted their data with high credit scores or high incomes could save the most.
Credit Karma analyzed the data from more than one million of its members to determine that an average user could see a decrease in federal tax liability of $1,821, compared to what it would have been absent tax reform. Credit Karma members with high incomes ($510,301 or higher) could see an average savings of $7,685. Those with incomes between $9,701 and $25,000 could save roughly $974 on average. Separately, the data also indicates that members with high credit scores (760 or higher on a scale of 300 to 850) could see average savings of $2,816, that’s more than double the amount those with lower credit scores might receive. Less than one percent of members could expect to see an increase in their federal tax liability this season. That group could owe $2,000 more on average.
“With tax reform in full effect this tax season, the question on most people’s minds is: will I owe money this year?” said Jagjit Chawla, GM of Credit Karma Tax. “And, while we don’t know exactly how things will shake out, we hope this study will shed some light on how tax reform could impact Americans’ overall.”
The full report, including insights, analysis, raw data and methodology, can be found here.
Taxpayers interested in learning about how tax reform could impact their federal tax liability can use the Tax Reform Impact Tool, available to all Credit Karma members in the U.S. By entering a few bits of information, members can quickly see how different aspects of tax reform could impact their federal tax liability and other ways tax reform could affect their 2018 federal taxes. For more information visit www.creditkarma.com/tax/hub.
About Credit Karma
Founded in 2007 by Kenneth Lin, Nichole Mustard and Ryan Graciano, Credit Karma is a personal finance technology company with more than 85 million members in the United States and Canada, including almost half of all U.S. millennials. The company offers a suite of products for members to monitor and improve credit health and provides identity monitoring and auto insurance estimates. Credit Karma leverages advanced data modeling to analyze and identify financial products that are a good fit for its members and has facilitated more than $40 billion in credit lines across financial products like credit cards, personal loans, mortgage refinancing, automotive financing and student loan refinancing.
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