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I'm waiting for mathjak to finish studying it and weigh in. BUT I will be getting approx $1800 minus Medicare costs and can't afford to have taxes taken out.
Doubling the personal exemption will most likely hurt the housing market. It's certainly not gonna help it.
Absolutely.
Quote:
Originally Posted by nalabama
I'm slow. Please explain how doubling the personal exemption will hurt housing market.
Because an incentive now to purchase in a high-tax states are the writeoffs for state taxes, property taxes, and interest. In some states, property taxes are killers. In my area, the average property tax is about $8k, at least. On the east coast double that, easily. We have plenty of homes here in certain areas with $12K-$18k taxes.
I am single and have always itemized because my deductions (primarily property taxes and interest, substantial charitable contributions when I worked, and state taxes) were always well in excess of even the standard deduction for a married couple. Raising the standard deduction and raising the tax rate, assuming there is no change in income threshold between tax brackets, will result in me paying more in taxes. The Reagan tax overhaul also resulted in me paying more taxes.
I've always done Roth conversions with bracket creep in mind. I'm hoping the thresholds for these brackets will increase by at least $15k.
Any way it's cut, however, this will cost me. There is nothing in this plan for me but higher taxes. As usual, the GOP is not here to help me.
Today's press release of the tax "plan" gets a D for lack of details, because the most important detail of all was left out. For the three proposed tax brackets of 12, 25 & 35 percent, what income amounts are the high end for each of these brackets?
I would prefer to have more brackets with smaller steps between the brackets. All this nonsense about having a "postcard" tax form and "simplification".
Really, do you want to fill out a postcard with all of your private information including SSN and mail a postcard to the IRS so anybody can scan it and steal your personal data while it is on the way to the IRS?
I wonder if anyone that is writing the new tax bill has ever filled out tax forms by themselves. I have been filling out my own tax forms since 1975. The easiest part of the process is once you have determined your actual taxable income is to go to the tax table that tells you what the tax amount is for your income (if under $100K). There could be 10 different brackets within those calculations, but it doesn't matter to the individual because it is all calculated in the tax table. I don't know why we need to cut down to just 3 brackets that have such huge steps between the brackets.
Did Burkmere mean to say "doubling the standard deduction"? I thought the Trump plan was going to eliminate the personal deduction.
Yes, the standard deduction is proposed to be doubled.
A few months back, there was talk of removing the personal exemption. I don't recall reading that now, however.
It's a neat trick if they can do it. Tell people - oh, look, we'll give you an extra $12,000 in standard deduction, but we're taking away the $4,050 personal exemption - so now, for a married couple, they've really only got a $3,200 deduction - in my case $1,600.
BUT, wait, my tax rate has gone up! What a crock. It's a shell game - and the house wins.
Eliminate the AMT - great for the higher income people; drop tax rates, great for the higher income; eliminate or change threshold on estate tax for the 80 families subject to it - big whoop. The so-called reform appears to be on the backs of the little guy, once again.
Last edited by Ariadne22; 09-28-2017 at 10:11 PM..
Reason: Correct standard deduction figures
Oh, I don't think the personal exemption is anywhere near as high a dollar amount as the standard deduction amount, so taxpayers should still come out ahead.
Oh, I don't think the personal exemption is anywhere near as high a dollar amount as the standard deduction amount, so taxpayers should still come out ahead.
Not really. The $4,050 personal exemption is eliminated:
New Plan: $24,000 - standard deduction married couple ---8,100 - personal exemption (2x$4,050)
$15,900 - Effective standard deduction -12,700 - Current standard deduction $..3,200- Reduction in taxable income
Current: $85,000 - Married couple
-12,700 - Standard Deduction -..8,100 - Personal Exemption
$64,200 - Taxable income
-18,650 - Taxed at 10% = $1,865
-45,550 - Taxed at 15% = $6,832 Total Taxes Paid = $8,697
Proposed: $85,000 - Married couple - 24,000 - Standard Deduction
$61,000 - Taxable Income
-18,650 - Taxed at 12% = $2,238
$42350 - Taxed at 25%= $10,587 Total Taxes Paid = $12,825
Even if the personal exemption was restored, this couple's taxes would be:
$2,238 - 12% x $18,650 $8,563 - 25%x$34,250 ($42,350-$8,100) $10,801 v. $8,697 under current law
No, as I said, unless the tax brackets are increased considerably, the house wins - big time.
Even Steve Cohn said this plan would not benefit the middle class:
Doubling the personal exemption will most likely hurt the housing market. It's certainly not gonna help it.
Quote:
Originally Posted by nalabama
I'm slow. Please explain how doubling the personal exemption will hurt housing market.
Trump's plan does not double the "personal exemption". It doubles the "standard deduction". The personal exemption is to be eliminated, which for most families will be a net increase in taxes.
The personal exemption is to be eliminated, which for most families will be a net increase in taxes.
Yup - and imagine not being able to deduct state and local taxes on the East Coast. Mortgage interest of probably at least $20k, property taxes $12K, city and state taxes, contributions. Those couples probably are writing off $30-$50k a year, if not more. An add'l $12k in standard deduction doesn't come close to offsetting the loss of taxes/interest/personal exemption deductions. Charitable contributions can only be added to the mix if you itemize. Without property and state and local taxes, who will that be? Only those with huge mortgages. With fewer people itemizing, charities will be hit as well.
And, on top of all that, the tax rates are higher.
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