Oops. My bad.
@intparent , how did you figure that? Biggest change is standard deduction + personal exemption of $10,350 goes up to $12,200 (standard deduction only), but what other changes are causing her expected taxes to go up so much? My low earning kid made judicious use of IRA deduction AND retirement tax credit to reduce his tax liability last year. Yes, he is very lucky as a low earner to have the money to contribute to an IRA.
@NJres - her kid is a graduate student.
@NJres Assuming her stipend and summer work will come out to about $23K in W-2 earning. No IRA. Ran that through a current tax calculator, got around $1,000 in federal tax. Lifetime Learning credit she would get today for fees paid to university times 20% would knock that to around $800 (calculator is high level, didn’t have the credit in it).
Then assumed under the new plan she will have a tuition waiver of about $17,500 added to her W-2 income. So her W-2 income jumps to $40,200. Also no Lifetime Learning credit. Ran one of the new plan calculators online, and it showed a new federal tax of about $2,800.
That is about 3.5 times her current federal tax. So really 250% more than she pays today.
Also – it just occurred to me that her state has an income tax. Was trying to figure out online; from what I can tell, they say is is a percentage of “taxable income”. I wonder if they will take a bigger bite as well. 
This waiver taxation by the House’s own estimate will bring in $65 BILLION from grad students between 2018 & 2027. Damaging our research and teaching capabilities at our universities to give tax cuts to corporations and the rich is taking America backward, not MAGA.
My daughter is a grad student but graduates May. I’m glad she is graduating May 2018 so the new tax laws won’t hurt her as much - this year she was a GA and had tuition waiver. If the new rules were in place for 2017 she would have had to borrow money to pay the taxes. She won’t be a GA in the spring as her final semester she is not allowed to have an outside job or be a GA because of other time commitments. She’d miss out on the LLC.
Three professors have approached her about doing a Phd with them. She is seriously considering it but was not planning to do it immediately. If the new tax laws go into effect she may rethink it - like most Phd students, having the tuition waivers makes it more of a viable proposition and them becoming taxable income would change the picture
I have at least 3 years left. We were planning on having a baby in the next year and a half.
Now things are kind of on hold because we don’t know if we’ll be able to even afford taxes.
Regardless of whether or not THIS passes, something similar will and we stand to have our tax expenses go up considerably.
Oh, no, romani. I was so looking forward to Rom and Mr. Rom’s baby.
Same… lol. One will still get here eventually but now we just feel kind of pinned.
We’ll see :/.
ETA: shoot this and the post 2 up was supposed to go on the other thread I started about higher ed taxes. Oops. They’re all running together.
Senate releases their plan Thursday I think, and then they have to reconcile the 2 versions, so, lots can still change.
Anybody have an opinion on whether rental income reported on schedule E income will be treated as “pass-through” and therefore be eligible for the lower 25% rate? Virtually 100% of this is return on capital, so large portions should be eligible.
I haven’t seen anything explicit one way or the other anywhere about this.
DW’s schedule C income is 100% labor, so no joy there.
^ Maybe you need to incorporate everything.
I thought rental income was going to be treated as pass-through. At least what I read indicates that. However, plenty of changes to come, I suppose.
Does anyone know if HSA contributions will still be deductible?
Just read that under the proposal, rental income would be considered self-employment income (thus subject to 15.3% SE tax).
@Madison85, do you have a link?
How would the income be divided between spouses?
I hope that article is wrong. Not sure how they can collect self employment tax on passive income.
Presumably, yes, because MSA’s are repealed but existing balances are permitted to be rolled into an HSA. Employers would also be required to report all HSA contributions on the W-2, which will be helpful when the Cadillac tax kicks in for 2020.
The idea behind the Cadillac tax is to hit employees who have “better than average” employer provided health benefits, but what it really is intended to do is to further hurt unions - teachers and state workers who bargained for these benefits instead of higher wages, etc. The other thing it does is to disproprortionately hurt people who live in more expensive parts of the country - which tend to be the more populated areas, which tend to be blue states.
Wasn’t the Cadillac tax part of the ACA? The party that enacted the ACA and the president who signed it wanted to hurt unions and people in blue states?