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It's simpler because the rates overall goes down across the board.
Just like a raise vs a bonus, I much rather get a small raise then a bonus. A bonus is like the deductions game, it requires gaming.
A bonus is taxed at the same rate, it's just withheld at a different rate because it can often make an impact by pushing you to a higher bracket. Unless you're living paycheck to paycheck you should prefer whichever is higher.
Should be interesting for those in sales or finance, where more than half of their compensation is in the form of bonus. Particular if they are relying on a big chunk of it, and the tax treatment is a bit unknown between withholdings and taxes owed when filing.
Should be interesting for those in sales or finance, where more than half of their compensation is in the form of bonus. Particular if they are relying on a big chunk of it, and the tax treatment is a bit unknown between withholdings and taxes owed when filing.
I would think for upper middle to upper class towns, the property tax deduction adjustment is just a drop in the bucket, largely offset...those residents may be saving 10k-40k a year (weighted higher for those previously in AMT, who were locked out of deducting prop taxes, with a $5-20k in AMT tax penalty a year, will now have zero AMT penalty plus a 10k prop tax deduction). That alone frees up north of $2k/mo, which could potentially be put towards housing. This could be a huge boon for some towns. And people may be selling off investments that are up 25% over the past few years, to be put towards a down payment, further fueling buying power.
I think many are hyper focused on just the property tax aspect of this...it is hard to gauge what will happen until people see what their paychecks look like in 2018, and see what is refunded/owed in 2019. In a more extreme scenario, a former AMT filer could go from owing $20k to getting a refund.
100% agree with you. I was doom and gloom initially but when I ran the numbers with my accountant with the new tax law, I will end up positive $4-$7k despite losing state income tax and real estate tax deduction.
I think this law might be bad for part time/semi retired folks paying large property taxes and they may flood the supply but there is pent up demand as young families cannot afford NYC and Westchester is even worse
I believe an experienced and well informed Real Estate professional can achieve a realistic value on your home vs. an internet data aggregator and a “ formula”not fully vetted nor validated by independent sources
people will live there until it's time to retire, then they want OUT! not a recipe for growth in the housing market.
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