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Old 10-04-2018, 07:48 AM
 
4,318 posts, read 5,268,236 times
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Quote:
Originally Posted by Grlzrl View Post
If you live in Texas, SALT doesn't even affect you since the state tax rate is zero.
Thatís also just not true. The vast majority of people here need to understand their bubble of financial circumstances doesnít apply to everyone. It doesnít matter if I live in a no income tax state, itís WHERE the income is generated NOT where you live alone. If your income is from TX and you live in NV, then yes itís 0%. If your income is from CA and you live in TX / NV / FL (etc.), your tax rate will be decided at CAís level. Most of my passive income is in high tax states for instance and even my company is based in CA so me just living in a no income tax state doesnít help me that much.
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Old 10-04-2018, 08:27 AM
 
Location: Raleigh NC
7,758 posts, read 6,114,541 times
Reputation: 6882
Quote:
Originally Posted by Lowexpectations View Post
So with a basic understanding of how taxes are calculated, gross income of 200k in both years and I pay more taxes in 2018 than 2017 did my effective rate go up or down? It will go up and never did I mention marginal rates as Iím aware they arenít whatís important
if you make $200K a year, you're considered rich, and your taxes paid should go up. According to some. Mostly the same people who say the rich are getting a break with the new tax law.

So you've so far done a comparison calculation and it looks like your tax $ paid will increase?
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Old 10-04-2018, 08:31 AM
 
6,997 posts, read 6,632,415 times
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Quote:
Originally Posted by GeoffD View Post
When push comes to shove, what really matters is your effective tax rate, not your marginal tax rate.


You're kind of quibbling over nothing if your AGI is $200K. On a joint return, the 24% bracket goes up to $315K. If you had some heroic deductions, it would knock you down to $165K where the 22% bracket ends.
The problem is that you lose about 10 to 39 cents on the dollar for the loss of personal exemptions and deductions that are cut off, and you gain about 2 to 3 cents on the dollar in less taxes assessed on some of the tax rates. That is the simple answer. It gets more complicated since some marginal tax rates actually increased as the tax brackets have been moved around.

Quote:
Originally Posted by BoBromhal View Post
According to some. Mostly the same people who say the rich are getting a break with the new tax law.
One individual doesn't disprove the distribution of changes in taxes owed under the new law according to income.

Last edited by lchoro; 10-04-2018 at 09:04 AM..
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Old 10-04-2018, 09:38 AM
 
844 posts, read 359,406 times
Reputation: 875
Quote:
Originally Posted by JonathanLB View Post
Thatís also just not true. The vast majority of people here need to understand their bubble of financial circumstances doesnít apply to everyone. It doesnít matter if I live in a no income tax state, itís WHERE the income is generated NOT where you live alone. If your income is from TX and you live in NV, then yes itís 0%. If your income is from CA and you live in TX / NV / FL (etc.), your tax rate will be decided at CAís level. Most of my passive income is in high tax states for instance and even my company is based in CA so me just living in a no income tax state doesnít help me that much.
Need to be careful with general rules as there are always exceptions.

For your passive income, I assume that's from rental real estate. In that case, it is taxable to both where the rental property is and where you live (as states tax residents on worldwide income) but then you take a credit for taxes paid to other jurisdictions.

For capital gain on stock, interest and dividend income, it doesn't matter where the income is "generated" it's only taxed to your state of residence. If it's from the sale of property, it's the same as the rental real estate rules.

For earned income, generally its where the income is earned, but there are many reciprocal agreements between states where wages are only taxed to the employee's state of residence.

The canned response from any SALT professional when you ask them a question is "it depends". Always need to drill down to the facts of a particular situation to get to the right answer.
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Old 10-04-2018, 09:48 AM
 
17,622 posts, read 12,203,533 times
Reputation: 12858
Quote:
Originally Posted by BoBromhal View Post
if you make $200K a year, you're considered rich, and your taxes paid should go up. According to some. Mostly the same people who say the rich are getting a break with the new tax law.

So you've so far done a comparison calculation and it looks like your tax $ paid will increase?

Well I wouldnít define rich by income and itís not that Iím opposed or mad my taxes are going up but simply pointing out some flaws in some of the information here
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