Posted on 12/02/2017 2:44:33 PM PST by Jim Robinson
Edited on 12/02/2017 2:54:27 PM PST by Jim Robinson. [history]
What happens to deductions for 401Ks in the tax plan?
“If CA/NY/NJ/etc residents don’t like their tax rates they can vote out all their state lawmakers.”
Even if you completely zeroized what they owe in state taxes, literally reducing their net tax to the state, county or city, millions of middle class taxpayers in these states will suffer a major Federal tax hike.
How can any moral person think that’s a good thing?
I think one of the things I caught was that if you don’t pay any taxes to start with, you don’t get money in hand for the child care credit. Is that right. Cuz I always thought that was a scam.
If they’re earning 60K to 100K, the larger standard deduction probably means they wouldn’t have enough to itemize anyway.
OK, but the article says, “tax cuts for all!”, not just for people earning under 100k. I submit that the headline is inaccurate, and there will be tax increases for many in the middle class, who are unfortunate to live in high-tax states.
Question? Why should a person in a low tax State pay for the person in the high tax State? That’s up to the people in that State to fix. Vote em out and lower taxes.
If correct, that means you must have an itemized deduction of around $50,000.
$65k AGI - $50k deductions - $4k exemption = $11k taxable->1184 in taxes.
Either you have the greatest tax accountant in the world, huge property taxes or huge charitable contributions. Or else I'm just missing something.
“Why should a person in a low tax State pay for the person in the high tax State?”
This Republcian “tax reform” bill will cause taxes to rise for many middle class people who are unfortunate enough to live in high-tax states like California. That means, in general, republicans who live in high-tax states like California.
You aren’t denying that their federal taxes will go up (because they can no longer deduct their oppressive state taxes); you’re just saying it’s not a bad thing that this is happening.
“Advice for young couples — try to live “below your means” and not in a MacMansion. And have more kids. “Make do!” Hand-me-down clothes build strength of character. America will be stronger and better if our young people are more like this.’
I probably don’t like you, but that is advice for the ages.
Don’t “try”.
Just do it. It can and should be done.
Buy the 9 yr old F-150 regular cab with 84,000 miles ($11,500) instead of the brand new extra cab with the eco-boost engine that you want ($60,000).
That’s what all men and families strived for, for millennia.
The one’s who succeeded often became millionaires. If not, rarely were want for anything.
I’m not saying or denying as I have no numbers. What I’m saying is that federal taxes are to fund the federal government. Deducting State taxes means that federal taxes are indirectly funding State taxes.
See my #42.
Yes, the numbers are what they are but both examples look like 1040EZ taxpayers. Higher income ($100-$300K/year) use Schedule A itemized deductions which is where this “tax reform” starts to look ugly.
These people aren’t “rich”. My daughter lives in CA, married, two small children, works her ass off for 15 years as a CPA, median home value in her market us $780K, husband teaches school, and because of SALT and mortgage deduction she is likely going to pay more taxes. Just sayin’.
PS: we don’t know what the final bill will do with SALT
Let me give you a hint. The first $38k of qualified dividends are taxed at 0% for a single. For a couple, it’s $76k. For amounts over that, you pay 15%.
$0 for the first 24,000
$1905 for the next 19,050 @ 10%
$7002 for the next 58,350 @ 12%
$12892 for the next 58,599 @ 22%
$21,799 total fed income tax on $160,000.
That’s an eff rate of 13.6% and you don’t need a CPA. You can file it on a postcard.
And you may do even better if you can also deduct mortgage interest and real estate taxes.
“What I’m saying is that federal taxes are to fund the federal government. Deducting State taxes means that federal taxes are indirectly funding State taxes.”
This thread is about the question of whether or not the “tax reform” bill will hike people’s taxes. I think it is undeniable that for millions of middle class taxpayers, it will result in higher federal taxes. Whether those tax increase are justifiable, as you suggest, is a different issue.
EVERYTHING Trump does is bad because it’s Trump. He does the same things Obama did and it’s the end of the world. It’s truly a disorder.
Please post the numbers.
I was assuming that your income was taxed like wages. Almost all of my investments are in tax sheltered retirement accounts, so I've never looked deeply into cap gains or dividend rates and didn't have them on my spreadsheet.
I don’t know, but gooogle turned up this:
https://www.forbes.com/sites/ashleaebeling/2017/11/10/the-senate-401k-grab/#1944a7446360
I ran the numbers a couple of day ago and assuming no major changes I see about an 11% tax cut. Some observations:
This tax plan greatly helps renters and those with relatively modest mortgages.
This tax plan greatly helps those who live in lower tax states.
This tax plan greatly helps those with kids less than 18.
Much as I hate the idea of praising congress, this tax plan is very friendly to those who live a conservative lifestyle.
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