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Actually, Kansas is a perfect example illustrating why Trickle-Down Economics does not work to benefit anyone other than "the 1%". Governor Brownback has essentially destroyed the economy of Kansas as a result of his policies.
My wife has a service business- personal training and she has decided to limit expansion because she does not want to deal with the issue of employees. I give you credit being a business owner is difficult. My wife can get plenty of clients to expand however based on the nature of what she does she has concerns that if she hired they would either not be as good as she would like or ultimately spin off into their own business and attempt to steal her clients.
well, i had every advantage thanks to my parents so i dont deserve full credit.
i dont provide the service so i wouldnt be able to make money if i didnt have employees. some clients do "steal" employees but not enough to matter. if you are only able to earn money billing for your own services, there is a limit to how much money you can make. maybe with the new tax bill, she can expand because of all the savings on the pass through taxes!
Not absolutely sure but it looks like SALT is back in totally, subject to a $10,000 limit. So NJ residents would still have $20,000 in deductions available for mortgage interest and deduction of state income tax. That's good if true. Not great, because it is limited and not indexed, but better than losing it altogether. For the typical New Jersey family earning $100,000 to $200,000, the tax bill might end up being a wash with the loss of exemptions. Plus the AMT is now eliminated for anyone making less than $500,000 ($1,000,000 for married couples), so that's a good thing for the typical $150,000 family.
All in all, I am much happier now, if the final version is what they are saying.
Not absolutely sure but it looks like SALT is back in totally, subject to a $10,000 limit. So NJ residents would still have $20,000 in deductions available for mortgage interest and deduction of state income tax. That's good if true. Not great, because it is limited and not indexed, but better than losing it altogether. For the typical New Jersey family earning $100,000 to $200,000, the tax bill might end up being a wash with the loss of exemptions. Plus the AMT is now eliminated for anyone making less than $500,000 ($1,000,000 for married couples), so that's a good thing for the typical $150,000 family.
All in all, I am much happier now, if the final version is what they are saying.
We shall see. Hopefully, it will be typed and placed online so the 325 million peons like us are allowed to actually read what the "legislators" wrote since there have been no public hearings.
So a vast majority of those currently under AMT will soon be exempt from AMT ($1MM threshold). And will now have access to up to $10k in SALT, plus $10k in prop tax deduction, which they were formerly excluded from...and no more AMT penalty bills (~5k-$20k). Plus additional child care credit. They will end up saving $10k to $25k+/year when they file....plus any savings in tax bracket rejiggering. No?
So a vast majority of those currently under AMT will soon be exempt from AMT ($1MM threshold). And will now have access to up to $10k in SALT, plus $10k in prop tax deduction, which they were formerly excluded from...and no more AMT penalty bills (~5k-$20k). Plus additional child care credit. They will end up saving $10k to $25k+/year when they file....plus any savings in tax bracket rejiggering. No?
Wait, where are you guys getting the 20K number from? I read it as 10K in EITHER state income tax OR property tax or any combination. So it's up to 10K only?
Why is there a 10K cap on mortgage interest? Isn't it up to 750K in mortgage principal for new mortgages, you can deduct whatever your interest was? Any existing mortgages are grandfathered under the 1MM?
Wait, where are you guys getting the 20K number from? I read it as 10K in EITHER state income tax OR property tax or any combination. So it's up to 10K only?
Why is there a 10K cap on mortgage interest? Isn't it up to 750K in mortgage principal for new mortgages, you can deduct whatever your interest was? Any existing mortgages are grandfathered under the 1MM?
From what I am reading mortgage interest is deductible on any mortgage up to $750,000 subject to a $10,000 cap. So, $10,000 or the actual interest, whichever is lower. The other 10K is the SALT deduction, which, as I understand it, can be split between property taxes AND income tax, or added together, subject to a $10,000 cap. So the 2 together would retain $20,000 in deductibility maximum. I put them together because most homeowners in high tax states use both. If you are not a homeowner, then you just have the $10,000 SALT. But you will be unlikely to utilize just the one deduction because of the doubling of the standard deduction. So most non-homeowners will NOT itemize unless they run a pass-through business and have lots of expenses to deduct such that they exceed the standard deduction.
Oh, the $10k SALT applies to mortgage interest, and is capped at $10k???
A $750k mortgage at a 4% coupon, 30 year fixed results in $556k in interest over the life of the loan, averaging $18.5k a year. Yet they are capping at $10k? Doing some quick math, a loan averaging $10k/yr in interest (4%, 30 yr fixed) is only a $400k loan.
Or am I thinking about this incorrectly...and the $10k cap is your tax bracket applied to the interest. I.e. say a 25% tax bracket, $10k cap allows for $40k of mortgage interest to be deducted.
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