@TatinG, it was never in the Senate bill. But it is in the version the House passed, and they need to be reconciled.
How does it favor private school tuition? Do you get to deduct it?
Then it would not have a single flat tax rate, since there would be a 0% and a whatever% rate.
Kind of like the current AMT, with 0%, 26%, and 28% rates.
You can use a 529 for private school tuition in the new bill, right?
So the medical expenses deduction is in the Senate bill?
That’s what I read, courtesy of Susan Collins.
You couldn’t use it before? That’s absurd. I wouldn’t know a thing about. Never had 529.
@intparent —Yes, that is my understanding—that 529 plans can now be used to pay for private K-12, and I assume religious schools also.
Editing to respond to @Iglooo. Correct…at the moment, 529 plans cannot be used to pay for K-12 education.
“Isn’t it $16,000? 2x6000+4000? Making the difference $8,000. That’s good money in my book.”
No - each person gets the exemption. Currently (for 2017) $12,700 SD plus $4050 each personal exemption so $20,900 for a married couple with no kids, not $16,000. Over 65s (my husband now and me after May next year) get an additional $1250 each so a total for oldies of $23,400.
For me personally, losing the ability to deduct state taxes and medical plus losing the personal exemptions would increase my taxes by $3000 based on 2016 income. And we are most definitely middle class. Even the senate bill will make us worse off - losing the personal exemption is huge for us cause our medical takes us over the $24k proposed SD already (last year our itemized was $26+)
^^Good explanation @swimcatsmom. But did you figure that out via a calculator, or did you just add up what you were losing? It may not look as bad when you input lower tax rates. I went to an online calculator and the story looked better than when I just added up my losses. However, I am not in a high tax state.
I went to a calculator someone posted a couple of weeks ago in the hopes that I was being overly pessimistic. It came out exactly as I had estimated unfortunately. Admittedly that had the house rates of 12% for the lowest while the Senate I believe will have 10% for the first $19 - 20k (ish - too lazy to check). So that will save me 2% of a little under $20k so $400 better off than with the house bill.
Yes, the impact on grad students is just awful.
Sorry for the delay in response, I had to step away yesterday because I was getting a little too angry.
I asserted that Marco Rubio’s amendment was disingenuous because he knew it would fail, but he would have it on the record that he tried to “save and expand the child tax credit.” I said he had total control over writing the bill. At the very same time that he was proposing the Lee-Rubio amendment, the Senate Republicans had 51 votes in favor of the bill.
If they simply would have voted no, they could have sunk the bill. They had, imho, complete leverage. (Much as I believe that Susan Collins did and gave her vote away for nothing.)
I did not make my point very well yesterday, perhaps I still am not.
When I get spun up, I tend to drop words from my typing which many of you may have noticed.
Don’t forget that in both bills they are switching from standard CPI to chained CPI.
How? Why? In Senate version, there’s no mention taxing tuition waiver. If House version wins, universities can lower graduate school tuition. Can they not? What’s stopping them from lower tuition or take some other measures?
Perhaps the Senate version will prevail. But what if it does not? This would take effect 1/1/18. Would universities be able to adjust tuition pricing that quickly?
We have already had this conversation over and over on the other thread specifically for how universities are getting slammed by this.
No one knows what unis can do. From the sounds of it, they are scrambling.
We are getting screwed as students. Full stop. Bye-bye student loan interest deductions and hello taxed tuition waivers.
I’m so sick of hearing people say “oh they’ll do something!” and poo-poo it when it is literally my (and thousands of others) entire future on the line. I will lose everything if I have to drop out. That isn’t an exaggeration. Unlike many here, I don’t have parents who can help bail me out of this mess.
Suggesting that anyone who itemizes now and might not be itemizing in 2018 due to higher standard deduction consider making January mortgage pymt in December. I am doing so. Accelerate deductions.
They probably could adjust for the fall of 2018. They may be ok for spring 2018. They can assume they paid the tuition for the entire year in the fall of 2017.
Only works if it goes to interest, not principal :). I may suggest this to my Son and to my D and SIL, depending on how much interest will have accrued by 12/31
I told my grad student D to pay her 1st qtr tuition before the end Dec so she can get the LLC. Will lend her the money ( no waiver this spring cause she can’t TA as she has to student teach)