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Salt is capped at 10k in this proposal. A good thing. First, because our system is riddled with deduction this, credit for that and so forth. This applies to individuals, married, married with children, various flavors of corporations, partnerships, etc. SECOND, the limiting of Salt deductibility shines a bright light on excessive state and local taxes. If the citizenry will pay more attention to the government units closest to them. Hopefully bringing pressure on SAL governments to rein in spending. A good thing.
Quote:
Originally Posted by Ponderosa
The standard deduction is misleading, because they fail to point out that exemptions are taken away.
Bottom line is this:
Under the new law a family of whatever size would pay no taxes on income less than $24000
Under existing law a family of
four would pay no taxes on income under $28,000 ($12K standard ded + 4 exemptions at $4K)
five would pay no taxes on income under $32,000
etc.
Also, I believe deductions for SALT are gone, though if it stays this way the bill is DOA in the senate.
LOL Rakin, true, Ponderosa is complaining about $3,500 but sneers at those of us who got nailed with paying full price HC insurance. My insurance went up $4,500 a year thanks to Obama and Democrats.
Yeah I thought Dems loved to raise taxes and help out the lower income. Ponderosa should be proud to pay extra, it makes him a Liberal hero.
Me, I'm already dropping an extra $8-10k a year because of that Democrat tax plan passed by Obama.
Unbelievable, I just heard a Dem on TV claiming that by capping the SALT taxes states like NY are subsidizing the rest of the country. Hey New York, tell your politicians to stop abusing you and get your spending under control so you won't have to tax the bejesus out of your citizens.
kinda hard for a 28 year old couple to have opportunity cost to buy equities in 1995, huh?
Just because you are struggling financially doesn't mean everyone else is.
You live in a high cost city and state.
The way to change that is move, like so many others did from high tax states to low tax states.
And that has zero to do with the Fed tax changes proposed.
Yes, up to 35%, but it is convoluted where the % depends on amounts etc. With many deductions gone, many S-Corps will end up paying more than before. Time will tell.
Since you don't itemize it probably wouldn't affect you much. It 's hard to tell for sure depending on what else you have going on but here is an example. Under the old plan you get (4050x4)=16200+12700=28900 (personal exemptions+standard deduction) Under the new plan you just get a 24,000 deduction. So old has you with an AGI of 85100 and new has an AGI of 90000. So you have more income to get taxed on but since the brackets changed you will probably still pay less. Under the old plan taxes on 85,100 was 12824.* Under the new plan 12% of 90000 is 10800.
You're right that the new plan would probably be more beneficial. The child tax credit is going up from $1000 to $1600, plus there is a $300 credit per taxpayer and non-child dependent. So it's even better than that!
You do understand that the house bill eliminates personal exemptions, right? It doesn’t matter who’s reporting it. That would wash away the benefits of a higher standard deduction.
If I’m wrong, please correct me. I’d love to be wrong on this.
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