Oh, I see - not state income taxes but state property taxes are still deductible. Thanks for the clarification.
Currently State income tax is deductible, as are state and/or local property taxes. They are two different things ... State income tax will no longer be deductible at all... Property taxes (what I pay to the county) will be deductible but subject to a $10,000.00 cap...
When I was renter saving to become a homeowner, a key to making homeownership affordable was that you could deduct state income tax, mortgage interest, and property taxes. This equation has now changed for many contemplating homeownership as it will reduce what they can afford. I wonder if I would have become a homeowner under the proposed tax code... it certainly would have been more difficult...
Oh, I see - not state income taxes but state property taxes are still deductible. Thanks for the clarification.
Tom
Market Commentary | My Blog | TSP Talk Plus | |
I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.
I have no Mortgage, no debt, here in GA I qualify to pay $0.00 State taxes due to Age and income. I have to take the Standard Deduction, so the deal would be good for me.
Question...the "Continues to allow people to write off the cost of state and local property taxes up to $10,000" does that assume that some property tax is state property tax and some is local property tax?
Or...is it a combination of state INCOME taxes and property tax...combined up to $10,000?
CURRENTLY 50% C and 50% S (as of COB 04/18/2024) 2nd April IFT
Alimony, student loans, state income taxes...yeah close to there...maybe 45-50K in deductions. Originally in 28% current tax bracket takes me back down into 25% tax bracket I believe.
And deductions are calculated at the actual rate...not a general "effective" rate, right?
What would be cool, is if they (or anyone) came up with a tab oriented program where you quickly enter in your income and major itemized deductions allowed this year, compared to what is proposed with this new tax plan, to see if you're a winner or loser.
Yeah. Lots of Fox News ex-execs (and Hollywood types too, keeping it politically neutral ) are gonna go ape$h!t when they start doing the math (lol).
Here's the thing...if the gov't is now going to now tax income that goes towards spousal support, shouldn't they eliminate the tax for the person receiving it?
Still a net plus for the gov't since the receiver is in a lower tax bracket.
Last edited by FireWeatherMet; 11-02-2017 at 02:54 PM.
CURRENTLY 50% C and 50% S (as of COB 04/18/2024) 2nd April IFT
Tom
Market Commentary | My Blog | TSP Talk Plus | |
I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.
It is really hard to figure without knowing what the brackets are. If they are the same, for single you save $1,792.25 for income up to the top of the current 15% bracket and any income over the 25% Bracket is reduced by 3% or more unless you make over $1M
Table 1. Single Taxable Income Tax Brackets and Rates, 2017
Rate From To Tax Owed 10% - 0% $ 0 $ 9,325 10% of Taxable Income 15% -12% $ 9,325 $ 37,950 $932.50 + 15% > $9325 25% -25% $ 37,950 $ 91,900 $5,226.25 + 25% > $37,950 28% $ 91,900 $ 191,650 $18,713.75 + 28% > $91,900 33% $ 191,650 $ 416,700 $46,643.75 + 33% > $191,650 35% $ 416,700 $ 418,400 $120,910.25 + 35% > $416,700 39.60% $ 418,400 up $121,505.25 + 39.6% > $418,400
A little hard to read ...
source: http://www.zerohedge.com/news/2017-11-02/gop-tax-plan-talking-point-highlights-released
Tom
Market Commentary | My Blog | TSP Talk Plus | |
I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.
Just looked at my 2016 taxes. Itemized deductions plus exemptions it came to $24,300. It looks like I will stay in the same tax bracket but will lose some of my itemized deductions. I will have at least $300 less in deductions for when the new tax laws take effect. So I guess that would be a break even for me.
May the force be with us.
Nevermind...if the 1st bracket starts at zero, that isn't much help.
Just keep an eye on the ball. Lots of juggling left to do! Still a little confused about where the money comes from to pay for this plan. I understand the theory is that the economy is going to grow which will create jobs, etc. but still that's a lot of cuts overall! Would be surprised if there isn't some sort of deduction for state and local income taxes included before they're done haggling. Most tax plans tend to affect all the states relatively evenly. That is how they get enough support to get passed.
I think the create jobs is all smoke and mirrors. If I own a company now that is making a profit and I get more money from the government why would I hire more workers? Or if I can't find skilled laborers now to fill my positions why would I use the money coming from the government to try and hire more people I couldn't find already. Just more money in my pocket.
May the force be with us.
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