Author Topic: Income tax and child tax credit  (Read 464 times)

Davidsr

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Income tax and child tax credit
« on: November 01, 2018, 12:17:01 AM »
Ky resident.

Question about income taxes that will be filed march 2019.

Specifically how much to make losing child tax credit vs 22% tax instead of 25% for the next few years. Including new standard deduct 24k vs 12k.

Try give as much detail as possible. 

Married with 2 small children. Wife is stay at home mom. Own primary resident. Still owe 150k.

Last year gross 144k. Learned that after 110k. Take $50 of 1000 get child tax credit for every 1k earn after 110k. 

I can tapper my salary to right at 110k this year.

Or i can i earn another 15 to 20k next 2 months.

Does it make more sense to benefit from the 3% savings right now.

But

Lose 5% for next 40k. Thats based if after lose one child tax credit you start the next one at 130k. Or even worse is it 10% lose on first 20k.

If i earn more money thats good but i hate to earn more cost more. Im trying to pay down my primary resident to invest into rentel property.

In my eyes any money earned after 110k would need to have to payback atleast 2% to break even. In theory all money earned after 110k. If it was put toward my 4.375  morgage interest. Is it correct to assume i would be to the good?

I all ready max out 401k. Get pretty close to max out both my wife and i roth ira. Usually make up difference file our taxes. Because fidelty allows us to contribute till april for prevous year.

I have ask around. Most people i work with just try earn as much as possible and then firgure it out. But most are in lots of debt and spend alot on liabilities.


Proud Foot

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Re: Income tax and child tax credit
« Reply #1 on: November 01, 2018, 08:37:24 AM »
Go look at the DRAFT forms for 2018, specifically looking at Pub 972 for the Child Tax Credit Worksheet.  For 2018 the phaseout starting point has changed to $400k for Married Filing Jointly.

MDM

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Re: Income tax and child tax credit
« Reply #2 on: November 01, 2018, 10:59:58 AM »
You could estimate your 2018 taxes using the case study spreadsheet.  That includes the child tax credit and perhaps all other federal tax issues applicable to you.  It also has a simplified Kentucky tax calculation, which may or may not be accurate enough for your purposes.

BeardedMustache

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Re: Income tax and child tax credit
« Reply #3 on: November 02, 2018, 03:00:58 PM »
Try using taxcaster on the turbotax site. It will ask for 2017 numbers, just supply 2018 numbers and it will show both years' estimates.

Seems pretty accurate compared to my own estimate.

MDM

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Re: Income tax and child tax credit
« Reply #4 on: November 02, 2018, 03:23:34 PM »
Try using taxcaster on the turbotax site. It will ask for 2017 numbers, just supply 2018 numbers and it will show both years' estimates.

Seems pretty accurate compared to my own estimate.
Taxcaster has some notable omissions (e.g., saver's credit).  For some it will be accurate, for others not.  Seems more an advertising tool for TurboTax.

lhamo

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Re: Income tax and child tax credit
« Reply #5 on: November 02, 2018, 05:47:12 PM »
In addition to MDM's awesome spreadsheet, I like this online tax forecaster -- it is MUCH better than taxcaster, IMO because you can easily move between/edit the various input tabs:

https://www.olt.com/main/home/taxestimator.asp