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New tax proposals

partyof5partyof5 Registered User Posts: 1,989 Senior Member
Hopefully we can keep this thread open without being too political.

It is being touted as a tax cut , but I think our taxes will increase based on what Ive read so far.

They are getting rid of the AMT which is a plus as we've gotten hit with it for the last couple of years. They are also doubling the standard deduction which sounds great except that they are getting rid of exemptions, so if you have more than a couple of kids thats not a good thing. They are offsetting that with a higher child credit, but our income doesnt allow us to take the child credit anyway.

I really wish higher earners could get some of the education credits, that would be a plus.

Of course the devil is in the details, so this is just conjecture at this point.
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Replies to: New tax proposals

  • thumper1thumper1 Registered User Posts: 63,509 Senior Member
    edited September 28
    Unless we have crunched the numbers wrong...if we can't take a mortgage interest deduction, or property tax deduction...our taxes will be about $6000 higher. And that takes into account a higher standard deduction...big deal.
  • threebeansthreebeans Registered User Posts: 285 Junior Member
    I agree with a lot of it. Simplifying the tax brackets and doubling the standard deduction. I'm not sure anyone in the 10% bracket wouldn't come out ahead with that even if their new bracket is 12%. Also agree with a little credit for those of us who are taking care of our parents. I've been hit with the extra Obamacare tax and AMT recently and would love to see both of those go away - but that is selfish. I think eliminating some deductions will hopefully get some special interest groups less for themselves. Not sure how I feel about eliminating the deduction for state income tax. Feels like double taxation but it may also be an incentive for states to be thriftier.
  • Sportsman88Sportsman88 Registered User Posts: 1,573 Senior Member
    Mortgage interest and charitable contributions are protected. State and local taxes would no longer be deductible, presumably including property tax.

    Hard to say until the tax brackets are defined.
  • emilybeeemilybee Registered User Posts: 11,982 Senior Member
    I've read the mtg into deduction isn't being eliminated, but deductions for state and local taxes wouid be eliminated.

    Here are six charts that help explain the Republican tax plan.
    https://www.nytimes.com/interactive/2017/09/27/us/politics/six-charts-to-explain-the-republican-tax-plan.html

    Of course, it's important to remember at this point that it's basically only an outline with no Congressional input at all.
  • partyof5partyof5 Registered User Posts: 1,989 Senior Member
    We are hit with the Obamacare tax as well, that doesnt bother me considering its only .9% of income above 250k, which is negligible in the grand scheme of things. Anyone that is hit with that is already getting a break since they arent paying ss taxes on any amount over 118k. If your itemized deductions are over 24k, which our are, you will get a tax increase.
  • emilybeeemilybee Registered User Posts: 11,982 Senior Member
  • Cardinal FangCardinal Fang Registered User Posts: 15,776 Senior Member
    Many people on this board who live in high tax states like New York, New Jersey and California would pay higher taxes under this proposal, because they could no longer deduct their state taxes on their federal return.
  • threebeansthreebeans Registered User Posts: 285 Junior Member
    I disagree that is is negligible. My health care cost has increased $12,000/year in the past 5 years (premium and deductible which still does not include any dental insurance so that out of pocket also). Any additional tax is adding insult to injury.
  • MaineLonghornMaineLonghorn Super Moderator Posts: 31,364 Super Moderator
    Well, it will save time figuring out deductions. With the standard deduction at $24k for married couples, we won't reach that figure with mortgage interest, charitable contributions, etc. Not saying it's a good thing, just simpler.
  • partyof5partyof5 Registered User Posts: 1,989 Senior Member
    @Cardinal Fang agreed, but of course it plays into the narrative of "we are cutting and making things simpler!"
  • partyof5partyof5 Registered User Posts: 1,989 Senior Member
    I am going to watch this closely, as of now I am just not seeing all the savings that are touted for middle income earners.
  • sylvan8798sylvan8798 Registered User Posts: 5,954 Senior Member
    If they were to eliminate the deductions for property taxes, would that include those on rental properties as well? It doesn't seem like that would make sense, but the details are still to vague.
  • partyof5partyof5 Registered User Posts: 1,989 Senior Member
    @sylvan8798 no, rental properties are business income as long as you are renting them, so property taxes are expenses against any rental income.
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