Now this one is just dumb. While I get the concept, tuition remission for TA’s is a form of income, grad students aren’t rolling in dough. That means that either the Uni would have to up their ‘wage’ stipend by 15-25%, or the students would have to take out loans to pay the tax.
Are you FREAKING kidding me?!
Okay, THAT is a nightmare for PhD students, who barely scrape by as it is.
My daughter is a grad student. That tuition waiver is a huge help to her and is largely why she is managing to not incur further debt while she is in grad school. So tax that AND take away the LLC (she still has some tuition and fees to pay) AND take away the student interest deduction on the loans she already has… Wow.
She graduates May next year. When does this all go into effect if it is passed?
Dang, thanks, Bunsen!
@BunsenBurner post #399 OK, then what is the true statement? Are you saying the amount is incorrect or that property tax is deductible whether you pay AMT or not? The amount is rough guesstimate BTW.
This would literally triple my income- and I am an IN-STATE student.
We are not allowed to work more than 10 hours a week as PhD students. This could literally bankrupt us.
ETA: Nope, not double. This will TRIPLE my taxable income. I was only doing the math for one semester.
What is the point of going after grad students? The taxes they’ll have to pay on their tuition waivers will come out of their meager stipends for being a TA or RA. Are they supposed to take out loans to pay their federal taxes? Unbelievable!
^ What’s the point of going after the disabled? The sick? Students?
Because they can. Go after the people with the least power so you face the least resistance.
Property tax isn’t deductible now when you pay AMT. As far as I remember (from having been trapped by it a few times), you get no deductions at all, just pay a basic minimum tax that is higher than you would have if you’d gotten to take deductions. I tend to float right around the AMT number (get caught by it every four years or so if my business has a good year).
I think AMT and whether you’re writing off property taxes has to do with not just income, but how many write offs you have overall. I believe we have always gotten to write off property taxes, but sometimes it was limited, and we have paid AMT for as long as I can remember…except for last year. I assumed it was because income had gone up, but tax deductions claimed had gone down. I don’t think it’s always straightforward.
AMT is complicated. The formula calculates what your tax with and without AMT would be and you get to pay the higher of the 2 (so if the AMT would be lower you don’t do AMT) I have clients that make over $500K and itemize and don’t end up paying AMT. I have clients that make less than that that do.
Looks like my kid would go from a 15% bracket to a 25% bracket. Ouch.
http://www.people-press.org/2017/07/10/sharp-partisan-divisions-in-views-of-national-institutions/ indicates that Republican survey respondents’ answers to “colleges and universities have a ________ effect on the way things are going in this country” are 58% “negative” and 36% “positive”. So no one should be surprised that the tax bill is hostile in many ways to colleges, universities, and their students.
I’ve had to pay AMT the last two years and yes we deducted property taxes.
Anyone who is surprised by the details in the tax cut plan hasn’t been paying attention for a very long while.
I’m not surprised. Just furious.
You may have deducted property taxes on 1040 schedule A, but if you paid AMT, you had to add back that amount on form 6251, line 3 when calculating your AMTI (alternative minimum taxable income).
https://www.irs.gov/pub/irs-pdf/f1040sa.pdf
https://www.irs.gov/pub/irs-pdf/f6251.pdf
I’m not surprised, but hearing the details has me SMH.
My income is under $100,000. I will pay $4,500 more due to the loss of the dependent personal exemptions, elimination of the HOH tax brackets and the state income tax deduction.