OK, let’s take an example — husband: 90,000; wife: 70,000. — so 160,000 joint. In California, that’s middle class.
For every dollar above around 70,000, they’re paying a 9.5 percent at state level in California, right?
What’s the difference in federal taxes if they can’t deduct that heavy sum paid to the state?
Remember, they are also deprived of the personal exemptions (totaling 10,400), under the new tax bill.
Hard for me to believe their federal taxes aren’t going up. That’s the whole point of getting rid of the state and local tax deductions - to raise revenue in order to offset the business tax cuts.
$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.
“Hard for me to believe their federal taxes aren’t going up. That’s the whole point of getting rid of the state and local tax deductions - to raise revenue in order to offset the business tax cuts.”
exactly.