So do the math for us, Madison85.
No point in that since it’s a proposal and there could be changes.
It’s a proposal and we’re trying to understand it. Will the single mother pay more in taxes under this proposed legislation, or will she not? There is a fact of the matter. What is it?
Some single parents might and some might not.
They say there will be a calculator out next week to see how you fare.
I’m sure someone will come up with one by tomorrow.
Here is something of interest to you, bus:
The buyer of our House1 is grandfathered in with his over $500k mortgage. And we are not talking about a mansion here, folks!
Fortunately, Bunsen, we just refinanced into a great rate 15 year mortgage that we plan to keep…and don’t want to sell for a very long time. So if our house plummets in value, it would be good for us, as far as real estate taxes go. Then again, the voters here want to vote in every possible tax increase, so maybe they would still find a way for taxes to go up!
The elimination of LLC will affect S2 who started grad school this fall. He’s hoping to avoid student loans, but eliminating that deduction is unforgivable given the student loan crisis.
Living in a state where we pay more than $10,000 in property tax, pay property tax on our vehicles, and pay state taxes, there’s no way we’ll be ahead. We’ll also miss out on the medical deduction at a time where our insurance premium will be higher than a mortgage payment.
This plan is horrible. Huge cut for corporations.
Did anyone notice how easy they cut the corporate rate and said little about taking away any corporate deductions. So simple. Just a quick reduction to 25%.
So why so complicated on the individual side? Because it is a scam. they are shuffling the cards around so much as to confuse everyone.
The whole education deduction/credits, etc. is a jumbled mess. The whole itemized deduction system is a mess now. Personal exemptions and standard deductions are all jumbled up to confuse everyone. They give here and take away there.
Not much take away on the corporate side. Just a give.
And of course the interest deduction is preserved for real estate companies. Hmmm. Interesting. I wonder who owns and runs a large real estate company?
Individuals pay the majority of the tax revenues in the US. Does anyone have any idea how this compares to other Western countries? I did a quick search but could not locate it. Ultimately, if other countries have very low corporate tax rates and the US is not competitive then the companies will move their headquarters.
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Here’s a tax calculator if interested. It may not be complete but gives you a basic win or lose.
Ther were talking about lowering corporate tax so long. It is my understanding that it needs to be lower is universal consensus. I don’t think there’s much to debate. In the original Trump plan, corporate deductions were taken away. I assume it remains so. New thing in the Congress plan is limiting CEO pay to $1M to include in the expense. They can pay more but it won’t count as expenses. All that looks responsible to me. Now we need to make up the short fall. If it’s up to me, I would focus on the real middle class, those who make between $40-$130K and median house price $250K. I am all for removing/reducing deductions. It benefits people who know how to take advantage of them, mostly the upper/upper middle class. I am disappointed that charitable giving is mostly untouched and I would have liked to see estate tax exemption lowered not increased. If they remove step-up measure, they many recoup revenues lost in repealing estate tax. Not sure if step-up stays or not.
DH is now semi-retired, so it’s hard to know what our income will be going forward, but it will be lower than when he worked full-time. Will we still be able to contribute to & deduct HSA contributions? Will health insurance still be fully deductible for the self-employed? I know we’ll have fewer Sched A itemized deductions under this new plan, and don’t know that the higher standard deduction will make up for it.
We are middle class and the calculator came out the same as I had estimated. Our taxes would increase about $3,000. Losing the medical deduction, State income tax deduction and the personal exemptions really costs us.
They are making such a big deal about doubling the standard deduction - I’m not sure most people even realize that they are giving with one hand and taking away with the other by taking away the personal exemption.
A number of the provisions that reduce individuals’ taxes expire after five years. The corporate tax cuts are permanent.
Here’s the link to an extensive – and good – rundown by Michael Kitces on the proposed tax changes and what they mean to us all:
More details that are flying below the radar
-Alimony is no longer deductible
-old rule if you sell your house, the gain up to 500k for married is tax free as long as you lived there 2 of last 5 years, new rule you have to live there 5 of the last eight yrs.
- bill eliminates BOTH the ability to receive tax-free educational assistance from your employer and the unreimbursed employee expense for professional education. So if the employer pays, you’re recognizing taxable income, and if you pay, you get no deduction.
They’re not allowing someone to deduct the losses incurred from something like their house burning down or the roof blowing off in a storm, unless the damaged occurred in a declared natural disaster. That seems pointlessly cruel. Also pointlessly cruel is disallowing the deduction for medical expenses. What have these guys got against people who suffered major blows in their lives?
Re: https://www.kitces.com/blog/tax-cuts-and-jobs-act-2018-house-gop-tax-reform-proposal/
Note that the section under “Preferential 25% Tax Rates For Business Income From Pass-Through Entities” make it quite clear that this tax bill will further privilege capital over labor in terms of how income from each source is taxed. I.e. it will further advantage the already-super-wealthy (who derive the largest share of the income from capital) over all others (who derive most of their income from labor).
^ They aren’t filthy rich and able to afford pretty much whatever disaster befalls them. Everyone else is a moocher and they don’t like moochers.
But also not taxable to the recipient. Some people might like that on the surface since alimony payers are typically richer than alimony recipients. However, the extra taxes paid by the alimony payer are unlikely to produce the same amount of tax reduction for the alimony recipient, since the alimony payer is typically in a higher tax bracket than the alimony recipient, so that the net effect on the divorcees’ combined income tax is to increase it.