Author Topic: Republican Tax Plan 2017  (Read 72143 times)

Peter Parker

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Re: Republican Tax Plan 2017
« Reply #900 on: December 02, 2017, 02:44:38 PM »
Any other ideas? 

The past game plan under this potential tax future is to just be a multimillionaire.  Be sure to earn at least $500k per year, preferably as a self employed person.

Better yet, be Ivanka Trump and just inherit your money.  Don't show any earned income at all, just profits to the business you own (but don't work at, so you don't have any salary).

Even before this gift to the well-off, I looked at people's tax returns as part of my profession.  It always amazed me how many showed "a loss," but still managed to pay all their bills, have a beautiful home, and drive incredible cars....I'm obviously not doing it right. 

bacchi

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Re: Republican Tax Plan 2017
« Reply #901 on: December 02, 2017, 02:55:59 PM »
Even before this gift to the well-off, I looked at people's tax returns as part of my profession.  It always amazed me how many showed "a loss," but still managed to pay all their bills, have a beautiful home, and drive incredible cars....I'm obviously not doing it right.

Goodwill loss that can then be applied as a carryforward NOL?

Or, do a "trump" and build a hotel/rental unit and declare bankruptcy before you pay your GC/subs.

gerardc

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Re: Republican Tax Plan 2017
« Reply #902 on: December 02, 2017, 02:57:54 PM »
Even before this gift to the well-off, I looked at people's tax returns as part of my profession.  It always amazed me how many showed "a loss," but still managed to pay all their bills, have a beautiful home, and drive incredible cars....I'm obviously not doing it right.

I think you are doing it right. Those business expenses/deductions only help to consume more, but not to save anything and work towards FI. Those people are slaves to their own lifestyle!

Paul der Krake

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Re: Republican Tax Plan 2017
« Reply #903 on: December 02, 2017, 02:59:21 PM »
Sol cares about the little people too much. At which point do you stop feeling sorry for the electorate that keeps getting shat on but comes back for more?

NoStacheOhio

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Re: Republican Tax Plan 2017
« Reply #904 on: December 02, 2017, 03:41:57 PM »
So in summary we'll all pay a little less tax?

What happens to the backdoor/mega-backdoor Roth conversions?
My husband and I make a lot less than many people here.  We will have our taxes go up by $2500 mostly because of losing the daycare FSA and therefore losing much of the savers credit because we now need more taxable income to pay for daycare.  This assumes none of the changes from last night effect us because I have no finished reading all of them.

Source? I use a dependent care FSA as well, and that would suck hard.

The last thing I saw said they might remove that and move everyone to deducting it at the end of the year?

God fucking dammit this bill is a black hole.
The first step is acknowledging you have a problem, right?

https://forum.mrmoneymustache.com/journals/digging-out-of-a-hole/

Wise Virgin

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Re: Republican Tax Plan 2017
« Reply #905 on: December 02, 2017, 04:45:03 PM »
Sol cares about the little people too much. At which point do you stop feeling sorry for the electorate that keeps getting shat on but comes back for more?
Who asked you to feel sorry?

As one of the "little people" I keep being scolded about voting against my best interests. The scolds don't know what my best interests are. They think they know, but they don't, because they don't know me.

We "little people" have our own powers, our own wisdoms, and our own virtues. Don't feel sorry for us, it's unpleasant and patronizing, and annoying. We want jobs; then we'll take it from there.

Undecided

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Re: Republican Tax Plan 2017
« Reply #906 on: December 02, 2017, 05:19:45 PM »
Sol cares about the little people too much. At which point do you stop feeling sorry for the electorate that keeps getting shat on but comes back for more?
Who asked you to feel sorry?

As one of the "little people" I keep being scolded about voting against my best interests. The scolds don't know what my best interests are. They think they know, but they don't, because they don't know me.

We "little people" have our own powers, our own wisdoms, and our own virtues. Don't feel sorry for us, it's unpleasant and patronizing, and annoying. We want jobs; then we'll take it from there.

Limiting my question to federal government, do the statements that I emphasized in your quote mean that you think that Republican policies will lead to more jobs for the "little people"?

aaahhrealmarcus

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Re: Republican Tax Plan 2017
« Reply #907 on: December 02, 2017, 05:27:53 PM »
Your reasons are your own, and I won't presume to know them, but I can all but guarantee that unless you're a member of the 40 or so richest families in the US, this tax bill will not be in your best interest.
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Abe

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Re: Republican Tax Plan 2017
« Reply #908 on: December 02, 2017, 05:32:09 PM »
In this draft: https://www.budget.senate.gov/imo/media/doc/MCG17B31.pdf of the Senate bill (which, as mentioned above, may have little relation to whatever got passed), it seems they eliminated the separate 457(b) limit on page 296.

All that wording basically results 457(b) being included in the total 401k, etc limits.
They also eliminated the catch-up contributions to 457(b) plans a little further down.

« Last Edit: December 02, 2017, 05:35:35 PM by Abe »

sol

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Re: Republican Tax Plan 2017
« Reply #909 on: December 02, 2017, 06:03:00 PM »
Your reasons are your own, and I won't presume to know them, but I can all but guarantee that unless you're a member of the 40 or so richest families in the US, this tax bill will not be in your best interest.

Wise Virgin may be one of those red state voters who has been convinced that welfare for the rich makes everyone more free, despite the poverty that plagues them.  It's not really that hard to convince people to vote for things that make them more poor, if you can appeal to their patriotism.

Russia is very good at this.  Some of the people there LOVE the fact that their oligarchs can get so vastly wealthy (by robbing the national coffers).  They think it reflects positively on Russia that so many of their citizens are the wealthiest people on Earth.  And Putin rode a bear shirtless!  Of course they don't really have democracy or a free press, so maintaining this illusion is much easier there.

Wise Virgin

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Re: Republican Tax Plan 2017
« Reply #910 on: December 02, 2017, 06:18:13 PM »
Sol cares about the little people too much. At which point do you stop feeling sorry for the electorate that keeps getting shat on but comes back for more?
Who asked you to feel sorry?

As one of the "little people" I keep being scolded about voting against my best interests. The scolds don't know what my best interests are. They think they know, but they don't, because they don't know me.

We "little people" have our own powers, our own wisdoms, and our own virtues. Don't feel sorry for us, it's unpleasant and patronizing, and annoying. We want jobs; then we'll take it from there.

Limiting my question to federal government, do the statements that I emphasized in your quote mean that you think that Republican policies will lead to more jobs for the "little people"?
I think it will be similar to the tax cuts of Reagan's time, which I remember very well. The animal spirits will run for the next four or five years, after which they will tire, and there will be a hangover of malaise (either mild or severe, depending upon circumstances), and people will hunt for different arrangements to address that day's problems.

If you are convinced of the goodness of your ideas, wait for that time, and influence policy then. If you truly understand the problems of the electorate, your ideas will prevail.

Wise Virgin

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Re: Republican Tax Plan 2017
« Reply #911 on: December 02, 2017, 06:21:56 PM »
Your reasons are your own, and I won't presume to know them, but I can all but guarantee that unless you're a member of the 40 or so richest families in the US, this tax bill will not be in your best interest.

Wise Virgin may be one of those red state voters who has been convinced that welfare for the rich makes everyone more free, despite the poverty that plagues them.  It's not really that hard to convince people to vote for things that make them more poor, if you can appeal to their patriotism.

Russia is very good at this.  Some of the people there LOVE the fact that their oligarchs can get so vastly wealthy (by robbing the national coffers).  They think it reflects positively on Russia that so many of their citizens are the wealthiest people on Earth.  And Putin rode a bear shirtless!  Of course they don't really have democracy or a free press, so maintaining this illusion is much easier there.
You don't have to talk about me in the third person, Sol, I'm right here. I'm little, but I'm not too little to see, if you want to.

clarkevii

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Re: Republican Tax Plan 2017
« Reply #912 on: December 02, 2017, 06:29:55 PM »
The response and the tone of the posters in here is such weak sauce.

So many personal attacks.

You all should cut the nonsense out. This site is about FIRE and how to achieve these goals. Stop the petty stuff. Talk about how we can work this new tax plan to our advantage to achieve our goals.

This is stuff you CAN control.

Undecided

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Re: Republican Tax Plan 2017
« Reply #913 on: December 02, 2017, 06:33:03 PM »

I think it will be similar to the tax cuts of Reagan's time, which I remember very well. The animal spirits will run for the next four or five years, after which they will tire, and there will be a hangover of malaise (either mild or severe, depending upon circumstances), and people will hunt for different arrangements to address that day's problems.

If you are convinced of the goodness of your ideas, wait for that time, and influence policy then. If you truly understand the problems of the electorate, your ideas will prevail.

Perhaps. But the Reagan years were not as good as either the Carter or Clinton years for job creation, notwithstanding the tax cuts. That there seems to be a common belief to the contrary is one of the reasons I have my doubts about how honestly the electorate considers its problems and evaluates proposed solutions.

wenchsenior

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Re: Republican Tax Plan 2017
« Reply #914 on: December 02, 2017, 06:39:39 PM »
The response and the tone of the posters in here is such weak sauce.

So many personal attacks.

You all should cut the nonsense out. This site is about FIRE and how to achieve these goals. Stop the petty stuff. Talk about how we can work this new tax plan to our advantage to achieve our goals.

This is stuff you CAN control.

Nice of you to set everyone straight.  You better get to work on dozens of other threads right away LOL.

clarkevii

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Re: Republican Tax Plan 2017
« Reply #915 on: December 02, 2017, 06:53:29 PM »
The response and the tone of the posters in here is such weak sauce.

So many personal attacks.

You all should cut the nonsense out. This site is about FIRE and how to achieve these goals. Stop the petty stuff. Talk about how we can work this new tax plan to our advantage to achieve our goals.

This is stuff you CAN control.

Nice of you to set everyone straight.  You better get to work on dozens of other threads right away LOL.

Most threads aren’t like this... unless you are reading general melodramatic political posts in Off Topic.

Wise Virgin

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Re: Republican Tax Plan 2017
« Reply #916 on: December 02, 2017, 08:01:36 PM »
You all should cut the nonsense out. This site is about FIRE and how to achieve these goals. Stop the petty stuff. Talk about how we can work this new tax plan to our advantage to achieve our goals.

This is stuff you CAN control.
I can offer something along these lines that no one else has mentioned yet. I can tell you how to get rich under this Republican tax plan, and in the national circumstances current today, and with the current mood.

Invest in the central two-thirds of the United States.

The day of capitalists running around the world looking for a third-world person poor and miserable enough to work in their sweatshop is past. The day of sitting on the west coast and on the east coast and making the easy money, that day is challenged and sliding away. You can read the bill, but if you want to make money, read the signs of these times.

Now send me a dollar for my newsletter. :)

accolay

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Re: Republican Tax Plan 2017
« Reply #917 on: December 02, 2017, 08:04:33 PM »
Hello clarkevii! Welcome to the internet!

Talk about how we can work this new tax plan to our advantage to achieve our goals.
This is stuff you CAN control.

Any suggestions on how I should work this plan to my advantage then? I don't make that much money nor do I stand to inherit vast wealth someday. Suggesting that I can work this tax plan to my advantage is akin to suggesting that it'll create more jobs, or that it's going to trickle down for the masses. That, IMHO, is weak sauce.

Actually...keep a stash for the inevitable crash. Ask Kansas and Oklahoma.

fuzzy math

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Re: Republican Tax Plan 2017
« Reply #918 on: December 02, 2017, 09:28:44 PM »

You all should cut the nonsense out. This site is about FIRE and how to achieve these goals. Stop the petty stuff. Talk about how we can work this new tax plan to our advantage to achieve our goals.

This is stuff you CAN control.

Well since it appears that all my relevant deductions are gone, I can now take advantage of the new planby taking in new non legal children for a $500 deduction, or a parent for a $300 deduction. How many people do you recommend I take in to truly maximize this scheme?

Just think, with new lower retirement limits for all the public sector, now more of us can claim to be "maximizing our retirement accounts!" So much winning. Bigly.
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jean

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Re: Republican Tax Plan 2017
« Reply #919 on: December 02, 2017, 09:48:41 PM »
In this draft: https://www.budget.senate.gov/imo/media/doc/MCG17B31.pdf of the Senate bill (which, as mentioned above, may have little relation to whatever got passed), it seems they eliminated the separate 457(b) limit on page 296.
The bill that passed the senate is very different than that draft (which doesn't include the AMT or estate tax).  The bill that passed does not include this change. You can look up the section number to cross reference.  You can find the text of the bill that passed here (searchable pdf) from bloomberg: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

I thought it was on the Senate Finance website, but looks like a broken link at the moment. That seems fitting.

Abe

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Re: Republican Tax Plan 2017
« Reply #920 on: December 02, 2017, 09:56:57 PM »
Ways to take advantage of the tax plan:

Try to get convert your job into a pass-through corporation, if at all possible, and especially if your marginal tax rate is above whatever tax rate they end up setting for those corporations.  They may exclude "service professionals" like lawyers, doctors, accountants, etc. Some sources say there may be an exception to that exclusion if you make <$500k. Stay tuned to that.

Other ways to win:

1. if you care enough about this, move to a low-income-tax state. State governments don't do anything useful other than run prisons to confine murderers, occasionally fix a pothole in the interstate highways and find abused children foster homes. Personally I'll fork over the extra money to live in California instead of Texas, but may consider Florida as a backup.

2. Buy a cheaper house in a cheaper neighborhood. Good roads are for sissies. But seriously, you probably own too much house.

3. All you people factoring in the existence of Social Security and Medicare when you are >65yo, don't. The job creators "investing" in "middle America" may want that for their pockets also.

4. Work for some organization that has a deferred-compensation 457(b) plan. Seriously, if your employer doesn't have this, they suck. No matter how much free coffee they give you in the cafeteria, it's not $18,000 worth.

Anyone have other suggestions? (Snark allowed, but as long as its sandwiched into a suggestion - snark - suggestion format).
« Last Edit: December 02, 2017, 10:00:38 PM by Abe »

Abe

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Re: Republican Tax Plan 2017
« Reply #921 on: December 02, 2017, 09:58:49 PM »
In this draft: https://www.budget.senate.gov/imo/media/doc/MCG17B31.pdf of the Senate bill (which, as mentioned above, may have little relation to whatever got passed), it seems they eliminated the separate 457(b) limit on page 296.
The bill that passed the senate is very different than that draft (which doesn't include the AMT or estate tax).  The bill that passed does not include this change. You can look up the section number to cross reference.  You can find the text of the bill that passed here (searchable pdf) from bloomberg: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

I thought it was on the Senate Finance website, but looks like a broken link at the moment. That seems fitting.

Awesome! My favorite undeserved benefit persists! Thanks everyone else!

clarkevii

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Re: Republican Tax Plan 2017
« Reply #922 on: December 02, 2017, 10:06:19 PM »
In this draft: https://www.budget.senate.gov/imo/media/doc/MCG17B31.pdf of the Senate bill (which, as mentioned above, may have little relation to whatever got passed), it seems they eliminated the separate 457(b) limit on page 296.
The bill that passed the senate is very different than that draft (which doesn't include the AMT or estate tax).  The bill that passed does not include this change. You can look up the section number to cross reference.  You can find the text of the bill that passed here (searchable pdf) from bloomberg: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

I thought it was on the Senate Finance website, but looks like a broken link at the moment. That seems fitting.

Awesome! My favorite undeserved benefit persists! Thanks everyone else!

Yes! I agree. This is gold for those of us with 457s

Does anyone know if the Savers Tax credit survived? I usually get at least $400 of this underserved money.

Debts_of_Despair

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Re: Republican Tax Plan 2017
« Reply #923 on: December 02, 2017, 10:27:18 PM »
Just more proof Republicans don't give a shit about you. Or democracy.  This was all about paying off their billionaire donors. That's it. Fuck them.

And goddammit stop voting GOP. These assholes have no idea how to govern, don't care about anyone but themselves and the top 0.1%.  Remember the complaints from them about Obamacare being passed too quickly? That pesky legislation that had numerous public hearings, mark ups, debate...that one.  They just passed a bill no one has even read, written by Wall Street lobbyists, and are happy about it.

Fuck them all. Stop voting GOP.

Looks like someone forgot to take their Xanax.  Thanks for the advice but I will continue to vote GOP as long as people like Schumer (my senator, FML) continue to remain completely out of touch with reality.

bacchi

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Re: Republican Tax Plan 2017
« Reply #924 on: December 02, 2017, 10:49:00 PM »
I think it will be similar to the tax cuts of Reagan's time, which I remember very well.

I hope not. The national debt tripled, the US went from a creditor nation to a debtor nation, and then Reagan signed the largest peacetime tax increase in US history.

As GHWB said, it was "voodoo economics."

bacchi

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Re: Republican Tax Plan 2017
« Reply #925 on: December 02, 2017, 10:57:50 PM »
Ways to take advantage of the tax plan:

Try to get convert your job into a pass-through corporation, if at all possible, and especially if your marginal tax rate is above whatever tax rate they end up setting for those corporations.  They may exclude "service professionals" like lawyers, doctors, accountants, etc. Some sources say there may be an exception to that exclusion if you make <$500k. Stay tuned to that.

Yeah, jump on this. It'll only last a few years until they fix it.

It also looks like rental income will be included in this giveaway.

Quote
4. Work for some organization that has a deferred-compensation 457(b) plan. Seriously, if your employer doesn't have this, they suck. No matter how much free coffee they give you in the cafeteria, it's not $18,000 worth.

Aren't these only for not-for-profits? I would've loved to had one.

Wise Virgin

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Re: Republican Tax Plan 2017
« Reply #926 on: December 02, 2017, 11:32:56 PM »
I think it will be similar to the tax cuts of Reagan's time, which I remember very well.

I hope not. The national debt tripled, the US went from a creditor nation to a debtor nation, and then Reagan signed the largest peacetime tax increase in US history.

As GHWB said, it was "voodoo economics."
Do you consider the expense of the massive defense buildup that won the Cold War? How we outspent the Soviet Union until it collapsed without a shot being fired?

Seems nowadays people think the 1980s were about nothing but money. They were not. They were lived under daily threat of nuclear annihilation.

Maybe an apt comparison to Reagan's deficits would be the massive deficit spending under GW Bush/Obama to keep our financial ship afloat during the great recession. That was some voodoo economics too. It wasn't so long ago the markets were cowering in paralysis in case the Federal Reserve raised interest rates a quarter of a point. How quickly we forget.

dilinger

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Re: Republican Tax Plan 2017
« Reply #927 on: December 03, 2017, 12:28:01 AM »

Other ways to win:

1. if you care enough about this, move to a low-income-tax state. State governments don't do anything useful other than run prisons to confine murderers, occasionally fix a pothole in the interstate highways and find abused children foster homes. Personally I'll fork over the extra money to live in California instead of Texas, but may consider Florida as a backup.

36% of my state's budget goes to education.  Another 20% went to Medicaid.  Only 2% went towards prisons.  You may want to rethink your opinion of state government usefulness..

accolay

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Re: Republican Tax Plan 2017
« Reply #928 on: December 03, 2017, 12:36:35 AM »
Do you consider the expense of the massive defense buildup that won the Cold War? How we outspent the Soviet Union until it collapsed without a shot being fired?

Seems nowadays people think the 1980s were about nothing but money. They were not. They were lived under daily threat of nuclear annihilation.

Maybe an apt comparison to Reagan's deficits would be the massive deficit spending under GW Bush/Obama to keep our financial ship afloat during the great recession. That was some voodoo economics too. It wasn't so long ago the markets were cowering in paralysis in case the Federal Reserve raised interest rates a quarter of a point. How quickly we forget.

So....the debt increase that will result from these tax breaks that are really constructed to greatly enrich the wealthiest Americans is like cold war spending? Come on man, we're not even getting a non functioning "Star Wars" system with this debt.

I suppose the similarity is that maybe we are under daily threat again of some nuclear destruction from another Red State.

effigy98

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Re: Republican Tax Plan 2017
« Reply #929 on: December 03, 2017, 12:55:10 AM »
I am trying to plan a post (apocalyptic) republican tax plan...

I live in a HCOLA (Bay Area).  You cannot find many homes less than $1,000,000....Now that we can no longer deduct all mortgage interest, I'm thinking  there may be downward pressure on housing prices--meaning I can no longer count on my home being what it was worth.  Therefore:

I will NOT be paying down my 30 year mortgage (i.e. making extra payments).  Instead I will wait and see what happens with housing prices, thus sharing the risk of downward pressure with the Bank.  Further since repubs value business over people, I'm going to be making a "business decision" should this event occur.  I will be banking ALL money that could have gone to my housing payment  AND if prices fall I will make a "business default" decision and walk from my home and pay cash for a depressed property.

Just trying to figure out what is best for me under this "me first" republican tax plan...

Any other ideas?  I'd like to know because the notion that we are looking out for the common good has flown out the window...

You could do this but you will have sever tax consequences, bad credit, and they can potentially take from your other assets except in a few sheltered vehicles such as retirement accounts. You could have lasting negative reprocussions for years.

Wise Virgin

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Re: Republican Tax Plan 2017
« Reply #930 on: December 03, 2017, 01:33:14 AM »
Do you consider the expense of the massive defense buildup that won the Cold War? How we outspent the Soviet Union until it collapsed without a shot being fired?

Seems nowadays people think the 1980s were about nothing but money. They were not. They were lived under daily threat of nuclear annihilation.

Maybe an apt comparison to Reagan's deficits would be the massive deficit spending under GW Bush/Obama to keep our financial ship afloat during the great recession. That was some voodoo economics too. It wasn't so long ago the markets were cowering in paralysis in case the Federal Reserve raised interest rates a quarter of a point. How quickly we forget.

So....the debt increase that will result from these tax breaks that are really constructed to greatly enrich the wealthiest Americans is like cold war spending? Come on man, we're not even getting a non functioning "Star Wars" system with this debt.

I suppose the similarity is that maybe we are under daily threat again of some nuclear destruction from another Red State.
The debt is going to increase anyway. You know that, right?

When Ronald Reagan ran for president in 1980, he made the case that the national debt was at a frightening level and would exponentially increase. 1980 was 37 years ago.

Today the national debt is at a frightening level and will exponentially increase.

The math for paying it off does not work. Maybe 10 years and a trillion dollars or so ago we would've had a chance to do something meaningful about it, except, well, Iraq War and great recession. This debt will never be paid off and it will eventually have to be settled by devaluation of the currency or the sale of hard assets.

Or we can try to grow economically, and buy ourselves time, and possibly reorganize and reprioritize.

This Republican tax plan should be viewed as more than a tax plan, it's also a geopolitical power maneuver to keep us relevant and check the influence of competitors. Similar to "Star Wars."

ZiziPB

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Re: Republican Tax Plan 2017
« Reply #931 on: December 03, 2017, 05:10:00 AM »
Does anyone know how the new AMT is supposed to work?  It would seem to me that someone taking just the standard deduction could still pay AMT under the Senate bill - so effectively, the AMT simply takes away the benefit of the new lower tax brackets for people above the threshold?



Bateaux

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Re: Republican Tax Plan 2017
« Reply #932 on: December 03, 2017, 06:50:58 AM »
I actually enjoy all the bitchin and gripes about this tax plan.  However, most of you guys are much smarter than me.  Any suggestions on how we work the final law to our advantage is appreciated.   
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Wrecks

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Re: Republican Tax Plan 2017
« Reply #933 on: December 03, 2017, 07:00:14 AM »
Well, my accountant just told me I get around a $12,000 punch in the wallet from this lovely new tax plan.

I hope Wise Virgin enjoys his/her extra $7.69 per week in each paycheck. ($400 average tax cut/52 paychecks).

Pizzabrewer

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Re: Republican Tax Plan 2017
« Reply #934 on: December 03, 2017, 07:12:38 AM »
I searched the document on Bloomburg for any mention of the savers credit.  Nothing found.  So I'm hoping it is unchanged.

albireo13

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Re: Republican Tax Plan 2017
« Reply #935 on: December 03, 2017, 08:21:00 AM »
Don't forget the black hole which is the war/conflict in Afghanistan.

Loss of lives ... drain on taxpayer's  money ....   no clear goal ... no end in sight.



Debts_of_Despair

  • Bristles
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Re: Republican Tax Plan 2017
« Reply #936 on: December 03, 2017, 08:24:38 AM »
Well, my accountant just told me I get around a $12,000 punch in the wallet from this lovely new tax plan.

I hope Wise Virgin enjoys his/her extra $7.69 per week in each paycheck. ($400 average tax cut/52 paychecks).

I find that really hard to believe unless you have 4+ kids, a gigantic mortgage or some insane property taxes.  Show us some numbers.

clarkevii

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Re: Republican Tax Plan 2017
« Reply #937 on: December 03, 2017, 08:24:57 AM »
Well, my accountant just told me I get around a $12,000 punch in the wallet from this lovely new tax plan.

I hope Wise Virgin enjoys his/her extra $7.69 per week in each paycheck. ($400 average tax cut/52 paychecks).

Can you explain how?

I'm going to be saving about $1500 (give or take depending on House or Senate bill) a year due to the tax plan. And I hardy pay any taxes.... like 3% of Gross Adjusted Income. BUT I live in Texas in a lowish cost of living area.

Are most of the people getting punched in the wallet because they count on the mortgage and property tax deductions?

Undecided

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Re: Republican Tax Plan 2017
« Reply #938 on: December 03, 2017, 08:33:49 AM »
Does anyone know how the new AMT is supposed to work?  It would seem to me that someone taking just the standard deduction could still pay AMT under the Senate bill - so effectively, the AMT simply takes away the benefit of the new lower tax brackets for people above the threshold?

I also went through an example last night that shows that I would pay the AMT under the Senate bill, even if I take the standard deduction. If your effective tax rate is less than 28%, and income is basically from W-2 income, there’s a zone where you seem to be subject to AMT without any itemized deductions. I don’t know whether that’s the “intent.” It seems like an oddity to apply an “alternative” system in that case. An obvious “fix” would be to exclude taxpayers who elect the standard deduction. I didn’t look closely, because it doesn’t apply to me, but it seems that income that qualifies for the pass-through treatment is not proposed to be added back for AMT purposes.

Debts_of_Despair

  • Bristles
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Re: Republican Tax Plan 2017
« Reply #939 on: December 03, 2017, 08:35:17 AM »
I estimate I will save about $1800.  Seems that would be the case for the typical mustacian.

ixtap

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Re: Republican Tax Plan 2017
« Reply #940 on: December 03, 2017, 08:35:58 AM »
Well, my accountant just told me I get around a $12,000 punch in the wallet from this lovely new tax plan.

I hope Wise Virgin enjoys his/her extra $7.69 per week in each paycheck. ($400 average tax cut/52 paychecks).

Can you explain how?

I'm going to be saving about $1500 (give or take depending on House or Senate bill) a year due to the tax plan. And I hardy pay any taxes.... like 3% of Gross Adjusted Income. BUT I live in Texas in a lowish cost of living area.

Are most of the people getting punched in the wallet because they count on the mortgage and property tax deductions?

Have you been taking the sales tax deduction?

sol

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Re: Republican Tax Plan 2017
« Reply #941 on: December 03, 2017, 08:37:45 AM »
Are most of the people getting punched in the wallet because they count on the mortgage and property tax deductions?

Yes, and the personal and dependent exemptions that we're losing.

We were able to itemize far more than 24k, and now we can't anymore.  For 2018 it will be about $10-12k of income that I will have to pay taxes on that was previously sheltered.  The increased child tax credit takes some of the sting out of it, but that's s temporary measure and will be phasing out over the next few years.

Undecided

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Re: Republican Tax Plan 2017
« Reply #942 on: December 03, 2017, 08:41:12 AM »
Ways to take advantage of the tax plan:

Try to get convert your job into a pass-through corporation, if at all possible, and especially if your marginal tax rate is above whatever tax rate they end up setting for those corporations.  They may exclude "service professionals" like lawyers, doctors, accountants, etc. Some sources say there may be an exception to that exclusion if you make <$500k. Stay tuned to that.

Anyone have other suggestions? (Snark allowed, but as long as its sandwiched into a suggestion - snark - suggestion format).

I suspect many service professionals will explore whether their business isn’t just providing disqualified professional services, but also consists of owning office space and equipment that can be put in a separate entity and then leased to their professional service business, and owning an administrative support service that provides contract workers to their professional service business (e.g., secretarial services, legal assistants, nurses, etc.).

farmecologist

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Re: Republican Tax Plan 2017
« Reply #943 on: December 03, 2017, 08:47:51 AM »
Does anyone know how the new AMT is supposed to work?  It would seem to me that someone taking just the standard deduction could still pay AMT under the Senate bill - so effectively, the AMT simply takes away the benefit of the new lower tax brackets for people above the threshold?

I also went through an example last night that shows that I would pay the AMT under the Senate bill, even if I take the standard deduction. If your effective tax rate is less than 28%, and income is basically from W-2 income, there’s a zone where you seem to be subject to AMT without any itemized deductions. I don’t know whether that’s the “intent.” It seems like an oddity to apply an “alternative” system in that case. An obvious “fix” would be to exclude taxpayers who elect the standard deduction. I didn’t look closely, because it doesn’t apply to me, but it seems that income that qualifies for the pass-through treatment is not proposed to be added back for AMT purposes.

The 'decision' to keep the AMT seems awfully strange when they talk big about 'simplification' of the tax code.  This really sucks and was obviously a backroom deal to make the deficit numbers look better. 


Undecided

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Re: Republican Tax Plan 2017
« Reply #944 on: December 03, 2017, 08:58:08 AM »
Are most of the people getting punched in the wallet because they count on the mortgage and property tax deductions?

Yes, and the personal and dependent exemptions that we're losing.

We were able to itemize far more than 24k, and now we can't anymore.  For 2018 it will be about $10-12k of income that I will have to pay taxes on that was previously sheltered.  The increased child tax credit takes some of the sting out of it, but that's s temporary measure and will be phasing out over the next few years.

An odd effect of that, although not directly relevant to Sol in WA, is that many who lose the ability to itemize will consequently pay higher state income taxes, too.

My state allows either a very modest standard deduction (on the order of $4,300 for MFJ) or the balance of the taxpayer’s federal itemized deductions after subtracting this state’s income taxes. So those who had been itemizing (just under 50%), but no longer can, will see their state taxable income increased by the amount by which their previously itemized deductions (other than state income tax) would have exceeded that $4,300 standard deduction.

Wrecks

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Re: Republican Tax Plan 2017
« Reply #945 on: December 03, 2017, 09:06:01 AM »
Well, my accountant just told me I get around a $12,000 punch in the wallet from this lovely new tax plan.

I hope Wise Virgin enjoys his/her extra $7.69 per week in each paycheck. ($400 average tax cut/52 paychecks).

I find that really hard to believe unless you have 4+ kids, a gigantic mortgage or some insane property taxes.  Show us some numbers.

I am single, no kids, live in NY, very high property taxes, and I make high 6 figures/low 7 figures (my income is variable because I'm self-employed). I am a consultant so no special treatment for my pass through.

Yeah I can afford it. If it were being used to give the middle middle class a meaningful tax break, or to pay for health care or infrastructure or educational initiatives I'd be fine with that. But I don't like money siphoned out of my pocket to give to the ultra-wealthy and corporations.

farmecologist

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Re: Republican Tax Plan 2017
« Reply #946 on: December 03, 2017, 09:07:57 AM »
Are most of the people getting punched in the wallet because they count on the mortgage and property tax deductions?

Yes, and the personal and dependent exemptions that we're losing.

We were able to itemize far more than 24k, and now we can't anymore.  For 2018 it will be about $10-12k of income that I will have to pay taxes on that was previously sheltered.  The increased child tax credit takes some of the sting out of it, but that's s temporary measure and will be phasing out over the next few years.

An odd effect of that, although not directly relevant to Sol in WA, is that many who lose the ability to itemize will consequently pay higher state income taxes, too.

My state allows either a very modest standard deduction (on the order of $4,300 for MFJ) or the balance of the taxpayer’s federal itemized deductions after subtracting this state’s income taxes. So those who had been itemizing (just under 50%), but no longer can, will see their state taxable income increased by the amount by which their previously itemized deductions (other than state income tax) would have exceeded that $4,300 standard deduction.

I posted this in another thread but it seems like taking better advantage of 401K/403B plans will become a much more important tool to reduce income.  The majority of people that have a 401K/403B plan currently do not come anywhere near maxing them out.



Wrecks

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Re: Republican Tax Plan 2017
« Reply #947 on: December 03, 2017, 09:10:00 AM »
Ways to take advantage of the tax plan:

Try to get convert your job into a pass-through corporation, if at all possible, and especially if your marginal tax rate is above whatever tax rate they end up setting for those corporations.  They may exclude "service professionals" like lawyers, doctors, accountants, etc. Some sources say there may be an exception to that exclusion if you make <$500k. Stay tuned to that.

Anyone have other suggestions? (Snark allowed, but as long as its sandwiched into a suggestion - snark - suggestion format).

I suspect many service professionals will explore whether their business isn’t just providing disqualified professional services, but also consists of owning office space and equipment that can be put in a separate entity and then leased to their professional service business, and owning an administrative support service that provides contract workers to their professional service business (e.g., secretarial services, legal assistants, nurses, etc.).

I don't understand what you're saying, or I'm misunderstanding the tax plan. Presumably it will still allow for pass through business expenses to be deducted.

This tax plan is just awful.

sokoloff

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Re: Republican Tax Plan 2017
« Reply #948 on: December 03, 2017, 09:10:13 AM »
We make a fair bit less than Wrecks, but using some online calculators (of uncertain accuracy), I estimated this plan will cost us over $20K per year with the loss of SALT and capping of property tax deductions and there isn't much in the way of marginal rate reduction to offset.

gerardc

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Re: Republican Tax Plan 2017
« Reply #949 on: December 03, 2017, 09:10:48 AM »
4. Work for some organization that has a deferred-compensation 457(b) plan. Seriously, if your employer doesn't have this, they suck. No matter how much free coffee they give you in the cafeteria, it's not $18,000 worth.

We have this 457(b), but AFAICT the account is paid out in full and taxed as soon as you quit your job, so you'll still be taxed at a high rate and won't be able to slowly roll into a Roth. What's the point?


Is this bill taking effect for the 2017 tax year?