Posted on 12/21/2017 10:53:13 AM PST by C19fan
Personal Exemption
A personal exemption is the amount that you can deduct from your income for every taxpayer and most dependents claimed on your return. Current law: $4,050 per person, which means a married couple with two dependents would receive a personal exemption of $16,200. New law: The personal exemption is eliminated. The exemption returns after 2025.
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I think your beef is with High Tax California and not the tax reform passed by Congress. Taxes are not going to come down in California, but most likely will be going up. Moving to a low tax state may be an option, an option I ended up choosing for myself and my family. Low taxes, low cost of housing and low cost of living is out there, hopefully this is an option that can work for you.
Look at the bright side, tax reform is going to spur tremendous growth over the next five years and hopefully offset the increased tax payments you may have to pay. You can always try maxing out on an IRA or 401k to offset your tax liability. Good luck
I owned a $5,000 bond once for a couple of years about 30 years ago. That's the only time. Never saw much sense in them. I've primarily stuck with equity mutual funds. It's worked out okay for me so far for the nearly ten years I've been retired now (no pension, disability, or for that matter any other income besides stock market gains). Besides covering my living expenses for those ten years, my financial asset balance is also nearly double now what it was when I retired. At this point though, I'll admit I'm looking forward to six months from now when I turn 62 and can start collecting social security. It will be nice to have a steady income again.
Right now, of my financial assets, I'm about 40% in equity mutual funds, and 60% in cash (non-interest earning). If the market goes up, I'll get the gains on the equity investments. If it takes a big dive, I've got the cash available to plow into equities.
I guess each of us is free to make our own bets on what investments will work best for our own situations. I hope your bonds work out well for you.
Beware of high city and county and school district property taxes throughout TX!
You're different than most people though. Most are so damned stupid that they'll believe the spiel thrown out by the realtor about how low their after-tax cost is because of the deductibility, even though they'll get practically no actual benefit because the net amount it exceeds the standard deduction by will be minimal.
There is no denying that if the government subsidizes something, you get more of it. That you're the exception to the rule, doesn't mean the rule doesn't remain valid for the majority of the population. When setting nationwide policy, it is necessary to look at the overall effect, regardless of their being some individuals who won't be swayed by the direction the government is trying to move them.
My wife and I plan to move/downsize, and in the process, will end up with excess equity from the sale of our house even if we buy a new house elsewhere. My thought was to use this additional cash to buy into equity mutual funds and get us some stock exposure. As long as you don't have to sell in a down market, you can still end up with dividends, although in a really bad stock market, those too will go down.
Yup. People are different in what peace of mind they need in order to be able to sleep well at night. For me, faced with having no income, having lost my consulting gig when I was 51, no unemployment comp, over a decade away from the earliest I could collect social security, and my investments having lost around 50% of their value in the 2007-2009 downturn, I did have to think twice before turning down an opportunity to go back to work. I did manage to sleep pretty well through it all though.
Opposite, here. I've always looked at the AFTER TAX cost of owning a home. I did all the financial planning (and determining if I could afford my home) based on deductibility of mortgage and property taxes. I did pro-forma tax calculations and immediately adjusted withholding after closing the house deal to minimize the amount taken out of my paycheck so I would come out on April 15 pretty much on target. It always pays to look at after tax consequences.
You need to understand that a tax CREDIT (reduction of bottom line taxes due) is usually better than a taxation EXEMPTION (reduction of the amount of gross income subject to taxation). How much better depends upon the relative sizes of the CREDIT and the EXEMPTION and upon the highest RATE at which the EXEMPTED income would have been otherwise taxed had that amount of income not been removed from taxable income. Understand that and also understand that the per child tax credit for each of your children is being increased from $1,000 to $2,000.
You need to REMEMBER the increase in the child credits as well as the removal of the personal exemptions for the children as you determine the effects of the law on you. You also need to remember the reductions in tax rates and the increases in the taxable income levels at which the rates kick in. The tax table rate changes have the effect of reducing the rates at which taxes are computed at various levels of income.
If you take ALL THE FACTORS into consideration, you’ll see that the net effect on you are not as bad as you fear and may even result in “positive” (i. e., less taxes due) changes for you.
I agree.
Here to the hope one of you croaks in your home!
Opps - you forgot to mention that the child tax credit - money taken directly from the tax you owe, not from the income on which that tax is computed - was doubled to an additional thousand for each child - and that your standard deduction was also doubled, which would more than compensate for loss of the personal exemption for husband and wife......
All in due time, of course. ;>)
(You don’t actually have to croak IN your house - one of you has to go before you sell the house, then it gets stepped up to market value and you avoid the capital gains tax).
Exactly! Totally corrupt.
;-) I have to admit your comment made me laugh, and I couldn’t pass on the humorous response. I hope you are both healthy and still have long lives ahead. 🙂
I'm not different that anyone I've ever talked to. If you need a tax break to afford your home, you cannot afford your home!
The Government giveth, and the Government taketh away. Blessed be the name of the Government.
"It always pays to look at after tax consequences."
It always pays not to count on the government. Or their tax breaks. As it seems some folks are discovering. And the more one pays in mortgage interest, the more one is just renting their home from the bank.
Wow! You are badly misinformed and also quite ignorant of tax exemptions. I suggest you educate yourself before posting again.
One thing I learned over the years... the only thing you can know for sure about the future is that it will be different than you expect.
LOL. Thanks.
Just did a treadmill test on Monday and got good scores. Did a 9 mile, 2,000 foot elevation gain hike yesterday with our local hiking group. Looks like I may be around a little while longer (to Mrs. POF’s dismay, I think).
I guess all those corporate finance guys and their CFOs don’t know much on how to evaluate investments.
Most of the lemmings and goyim on this thread are too stupid to realize they have been scammed.
Big time.
The ones that will be actually getting a chump change tax cut will see it disappear in 2026, it’s not permanent , but the loss of deductions for W-2 workers is,
This Mnuchin Cohn Goldman Sachs hatchet job sells out the middle class and all W-2 workers, and will raise massive revenue.
The goal was not only to boost corporations, which could have been done by just cutting the corporate rate to 21% , but to pay off the national debt and fully fund Social Security.
They did that by raising ALL W-2 workers taxes (some now, some in 2026) and taking away deductions that have been in place in some cases for 100 years .
This will cost the GOP majority in 2018 and the WH in 2020, but getting PERMANENT CORPORATE TAX CUTS was just too good to pass up.
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