Posted on 12/21/2017 10:53:13 AM PST by C19fan
So heartwarming to be told I am stupid. Seems like a common tactic on FR when someone indicates they might not be seeing a tax cut.
When excess medical expenses plus property taxes (try Texas!) plus charitable contributions plus two personal exemptions plus one 65+ exemption ($1,500) exceeds $24k, then yes, itemizing on the current tax system may well be more friendly.
“Fake news, unfortunately from our side.”
False flag agitprop.
People don’t realize that self employed pay: Federal Income tax + Self Employment Tax + State Tax + Local Income Tax
If you are in the 25% FIT + (15.3% x .9235) SE Tax + 3.07% Pennsylvania PIT + 2.3% local tax your marginal rate is 44.5%.
Then you pay 6% sales tax to spend it....
Makes you feel like Sisyphus rolling the stone up hill!
Ironically I pulled out my last tax return... and I itemized almost exactly $24,000 last year. So the doubling didn’t help me either, but I got a huge windfall from the changes to the child tax credit and pass through income
if you pass it through, then you pay almost none of those.
April 15th will tell the story. Everything up until then is just fake news.
If you meet all seven requirements: 1. age, 2. relationship, 3. support, 4. dependent status, 5. citizenship, 6. length of residency and 7. family income. You and/or your child must pass all seven to claim the child tax credit.
Age test
To qualify, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit.
Relationship test
The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency. An adopted child is always treated as your own child. (”An adopted child” includes a child lawfully placed with you for legal adoption, even if that adoption is not final by the end of the tax year.)You can also claim your brother or sister, stepbrother, stepsister. And you can claim descendants of any of these qualifying peoplesuch as your nieces, nephews and grandchildrenif they meet all the other tests.
Support test
To qualify, the child cannot have provided more than half of his or her own financial support during the tax year.
Dependent test
You must claim the child as a dependent on your tax return.Bear in mind that in order for you to claim a child as a dependent, he or she must: 1) be your child (or adoptive or foster child), sibling, niece, nephew or grandchild; 2) be under age 19, or under age 24 and a fulltime student for at least five months of the year; or be permanently disabled, regardless of age; 3) have lived with you for more than half the year; and 4) have provided no more than half his or her own support for the year.
Citizenship test
The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term “U.S. national” refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)
Residence test
The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however: A child who was born (or died) during the tax year is considered to have lived with you for the entire year.Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you. (There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040, lines 51 and 6c, or Form 1040A, lines 33 and 6c.)
Family income test
The child tax credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status. In 2017, the phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50.
In 2019, right? Because filing by April 15, 2018 is pretty much unchanged by the tax bill except for a lowering of the AGI threshold for deducting medical expenses from 10% to 7.5% (they made that retroactive to 2017; after 2018, it goes back to 10%).
You are forgetting or are unaware that the standard deduction was massively increased to 12K per person and the AMT was effectively removed as well. Do some homework before spouting off.
they just raised the phase out to like $500,000 or some crazy number.
your not stupid..
I said it would “be” stupid to choose to itemized when/if the doubled standard deduction would give you more.
The trouble with itemized deductions is that each item represents the judgement of government that the expenditure is for something good.
Charitable deductions are good and thus are deductible if you itemize.
Home ownership is good and thus home mortgage interest expenses are deductible.
Having children is good and thus taxes are reduced for people who have children.
If we instead make the system neutral with respect to what decisions are made by the taxpayer, we will have a system that leaves Americans able to make their own decisions free from government coercion.
I think that would be a good thing.
Now, it's the first $24k. No dependents. No small business. If we were in a high income level, say above $100k, we would like be ahead. But we're not.
If I understand the Bill:
Personal Deduction is $12,000 for each Taxpayer.
Two Taxpayers filing Jointly = $24,000.
Child Deduction for two Children = $4,000. ($2,000 each)
Total Deduction = $28,000 before paying one cent in Income Taxes.
Others here probably have more knowledge of the details.
um... I am confused... you said you are itemizing 23,000... but the new standard deduction is 24,000.. you just came out $1,000 ahead and simplified doing your taxes to boot.
Not sure what your upset about.
No, we're not ahead. We also (along with everyone else) lose the personal exemptions, which for just the two of us would total almost another $10k. I am not sure why this is confusing.
I lose a net $10k in itemized deductions and the $8.2k in personal exemptions, with no kids, and my taxes are still going down $3.2k next year vs what they would have. The sky is not falling. Only 5% of people will see higher taxes next year, and nearly all are $200k+ income earners in 2 states. Standard deduction is not meaningless when its $24k of deductions (I was itemizing about $35k).
I have some sympathy for people who have relied upon tax benefits in the past to make decisions and now find that they are saddled with problems they would not otherwise have.
Wages are higher in some states than in others for the same work. Home prices similarly vary along with the average size of a home mortgage. These differences don't necessarily translate into a higher standard of living but a person in one state or region might find themselves paying a higher proportion of their income on taxes than someone else who has the same family size, the same house size, the same interests, and virtually the same local amenities.
The tax laws have allowed differences between states that probably shouldn't exist and may be contributing to the increasing polarization of our nation.
"You just increased the base of my taxes by $16,200. That one item just increased my tax bill by over $3,500."
You're doing it wrong, C19fan. By your logic, I should be screaming about my taxes being raised by over a thousand dollars. But that's not how it works. You need to take the time and actually figure out your taxes with the 2017 exemptions, deductions, credits, tax tables, etc and then do it again using the NEW 2018 exemptions, deductions, credits, tax tables, etc. Obviously, try both standard deduction and itemizing under the new laws. If not much changed for you this year, you should be able to use your 2016 numbers.
"There is the child tax credit but one loses the personal exemption from claiming that child as a dependent"
This is correct. The old child exemption was worth $4050 * Tax rate. So at 25% tax bracket, it was worth $1,012.50. So your new $2,000 credit is really $987.50, once you figure in the loss of the exemption. Those in lower tax brackets benefit more, higher tax brackets (where the child exemption was worth more) get screwed worse.
That article is pre 2017 tax bill and non applicable
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