@Madison85 – or $12K single and $18K HOH. I have found that my widowed mother with significant health bills and maxed SALT will come out ahead to itemize. Now I just need to buy TurboTax to confirm this.
Remember if your mother is 65 or older, she will have a higher standard deduction, I believe an additional $1600
@CTScoutmom – Thanks for the reminder. I had forgotten that, but still think she will clear the $13,600 limit.
Thanks @CTScoutmom , didn’t realize there was that extra for over 65. Since both DH and I qualify, apparently our standard deduction will be $26,600. It’s unlikely itemized will top that but I’ll check anyway.
Note no ACA mandate if you miss coverage for less than 3 months for first time.
I used 2017 numbers in my tax preparation software for 2018 and it looks nothing has changed. We will get back roughly the same amount that we received in our 2017 tax year refund. So much for that tax cut. At least I got gas for $1.99/gal last week!
I think we’ll owe. We itemized well over the new standard deduction in 2017 and likely will in 2018 - losing the personal exemptions will hurt. We just downloaded all the new software this week - I should try mine like you did @partyof5 .
What do you think of the new 1040 with it’s 6 schedules? We’re not thrilled at my firm because for most, if not all, of our clients it will add steps to our checking the returns. It may not sound that huge to now have to the schedules E,C, etc and estimated tax payments etc. etc. to the new schedules and then tie the schedules to the 1040 - but multiply that by hundreds of returns. it is just an unnecessary extra step and I really don’t see how it simplifies anything (except for people with the most simple returns).
@partyof5, thanks for the idea! I just downloaded and will run some numbers. I wasn’t sure how to finish out the year on a couple items, maybe this will help.
The schedules are sort of fake, they just rearrange what used to be on two pages of the 1040. They took the sections of the old 1040 and broke them out into a “schedule” (“additional income and adjustments to income”, “tax”, “non-refundable credits”, “other taxes”, “foreign address and third party designee”), the line numbers don’t even start over.
Last year’s 1040 was 79 lines; this year’s 1040 + schedules1-5 - reserved lines is 72 lines, so it seems like it’s about the same.
Anyone know where the 20% small business income deduction is taken? I downloaded the preview of the software I use (TaxAct), and entered some numbers to play around. It doesn’t appear to be calculating the 20% deduction at all.
The QBI deduction is Line 9 of Page 2.
I had about 8 hours of continuing education just on it last week. I don’t believe anyone is going to be able to lean hard on tax software and get it right this year - there are just too many elections and moving parts. Maybe in the straightforward situation where you’re under the income limit and have one activity, all of which is QBI.
As far as I know, all of Intuit’s tax products require a manual entry for QBI. I don’t know what Tax Act does.
It’s not what you get back, it’s your total tax obligation for the year, assuming your income stayed the same. Most companies reduced withholding to reflect the new brackets.
We’ll pay less tax on roughly the same income.
@allyphoe, thanks.
The preview version isn’t calculating this yet. It should be straightforward for us - I’m a W2 employee, DW is self-employed filing schedule C in a “specificied service trade or business” (she’s a real estate agent), and we have schedule E real estate rental income.
@MomofJandL yes I understand that however I get additional federal taken out of my and I used the exact same numbers as last year so if I received a tax cut I probably should’ve got a bit of a larger refund. If you look at my posts in the closed thread I didn’t think we would get much because we were in the bracket that really didn’t get much of a cut.
Obviously this is a guesstimate but I’m not anticipating the windfall that has been touted. I do have rental property which may give me a paper loss this year so that may help. It’s my first year, so I haven’t run the numbers.
@notrichenough Alas, that is not necessarily a straightforward situation. Off the top of my head, you probably aren’t going to be able to elect to aggregate, which makes it simpler (although not necessarily better). The rental may or may not rise to the level of a trade or business. Also, real estate agents aren’t an SSTB under the proposed regs.
If you’re under the income limits and manage the rental yourself and have no carryforwards and both activities are profitable, you might have a straightforward situation. But that’s a lot of ifs for the software to assume, and because claiming the deduction increases your penalty exposure so much, software aimed at laypeople really can’t assume much.
@allyphoe The tax bill said SSTBs are
That pretty much exactly defines self-employed RE agents,
@notrichenough The bolded was defined in the regs to only mean endorsement income. Unless you’re licensing your name / likeness, it doesn’t count.
Back when paid preparers were required to start e-filing, the law said, “filing is defined as physically putting until the mail.” The regs, however, said “filing is preparing the tax return.” In tax, you can’t rely on the plain language of the law.
Well, test #1 on the self-employment passthrough is the level of income:
Link: https://www.taxnotes.com/tax-reform/economic-analysis-do-skills-and-reputation-nix-passthrough-deduction
(good article, worth a full read through)
I’m self-employed with a 5-figure annual income, so well within the thresholds. Though I still thing I need to study this more to understand it.
Another article here: https://www.thetaxadviser.com/issues/2018/apr/understanding-sec-199A-business-income-deduction.html
Haha, yeah, no, that’s not how DW is making her money.
I think we will be under the threshold, which squeezes out much of the confusion.
Note that the Tax Notes article was published before the Regs were, so should be used with caution.
I think that for those of us with incomes below the threshold it doesn’t matter what the regs are – the threshold amounts are written into law. I agree that it is probably very confusing for higher income earners. But if I was earning $160K a year from my self-employment, I’d be paying for a CPA to do my taxes rather than trying to figure out whether or not it’s worth the extra $20 to buy the “Premier” rather than the “Deluxe” version of TurboTax. 
(My guess is that with the 20% write-off I won’t owe any income taxes at all beyond the self-employment tax. So probably a bit of a refund coming, since I opted to pay my estimated as usual based on the 2017 totals).