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Thread: Details of Proposed Tax Plan

  1. Default Re: Details of Proposed Tax Plan

    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...

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  3. #14

    Default Re: Details of Proposed Tax Plan

    Oh, I see - not state income taxes but state property taxes are still deductible. Thanks for the clarification.

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  5. #15

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    Default Re: Details of Proposed Tax Plan

    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.
    11/13/2019
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  7. #16

    Default Re: Details of Proposed Tax Plan

    Quote Originally Posted by tsptalk View Post
    This $10,000 limit should only impact the higher income earners but I never thought of the state tax deduction as an issue until I heard someone talk about the reason they wanted to get rid of it.

    It makes people who pay less state tax, pay more federal tax comparably.

    A basic example, someone making $100,000 in Florida (0% state income tax) will pay federal tax on $100,000, while a person making $100,0000 in New York who pays say $7,000 in state tax, only pays federal tax on $93,000. Both Americans paying different amount of federal tax on same income.

    So I can see that states with no state income tax would be against the deduction since its residents would pay a higher percentage of federal income tax.

    It was something I never considered, although I haven't come to any conclusion on what I think about it yet.
    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 100% G (as of COB 11/01/19) 1st Nov IFT

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  9. #17

    Default Re: Details of Proposed Tax Plan

    Quote Originally Posted by tsptalk View Post
    What tax bracket would that put you in because a $7K - $8K tax increase would mean you're talking about $50,000 to $55,000 in deductions in just those items - and that's at about an 18% effective rate. I would have $0 deductions under those items so I would pay those taxes.
    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.

    Quote Originally Posted by tsptalk View Post
    I think no matter how you slice it, someone will win and someone will lose, and that's item by item.

    On the alimony, I agree. If one person has to claim it as income, the person paying should be able to deduct.
    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 03:54 PM.
    CURRENTLY 100% G (as of COB 11/01/19) 1st Nov IFT

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  11. #18

    Default Re: Details of Proposed Tax Plan

    Quote Originally Posted by FireWeatherMet View Post
    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?
    It sounds like, the way StockSurfer put it, the income tax deduction is out. Just property tax.


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  13. #19

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    Default Re: My taxes are going upppp - alot

    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

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  15. #20

    Default Re: My taxes are going upppp - alot

    A little hard to read ...


    source: http://www.zerohedge.com/news/2017-11-02/gop-tax-plan-talking-point-highlights-released


    Quote Originally Posted by tsptalk View Post
    Please use this thread to discuss the tax plan, not ideological differences, if that's possible.

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  17. #21

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    Default Re: Details of Proposed Tax Plan

    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.

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  19. #22

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    Default Re: My taxes are going upppp - alot

    Nevermind...if the 1st bracket starts at zero, that isn't much help.

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  21. #23

    Default Re: My taxes are going upppp - alot

    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.

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  23. #24

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    Default Re: Details of Proposed Tax Plan

    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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