Author Topic: Republican Tax Plan 2017  (Read 381039 times)

sol

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Re: Republican Tax Plan 2017
« Reply #1300 on: December 15, 2017, 01:51:27 PM »
As of now, it appears that every single republican in Congress supports the tax bill.  Not a single one of them will vote against it, despite almost 70% of the country opposing it.

Flake folded.  Rubio folded.  Even Corker folded.

Let this moment stand in history, as a turning point for the republican party and for America.  Next week every single republican will unify behind the idea of raising taxes on the middle class, and spiking the national debt, in order to give tax cuts to billionaires.  Not one will remember their promises to voters, or the ideology their party used to represent.

Peter Parker

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Re: Republican Tax Plan 2017
« Reply #1301 on: December 15, 2017, 02:09:37 PM »
As of now, it appears that every single republican in Congress supports the tax bill.  Not a single one of them will vote against it, despite almost 70% of the country opposing it.

Flake folded.  Rubio folded.  Even Corker folded.

Let this moment stand in history, as a turning point for the republican party and for America.  Next week every single republican will unify behind the idea of raising taxes on the middle class, and spiking the national debt, in order to give tax cuts to billionaires.  Not one will remember their promises to voters, or the ideology their party used to represent.

Up next:  Cuts to Social Security, Medicare, Welfare, SSDI, and education to pay for the giveaway to corps and the wealthy.  Health care?  Pffftttt! 

What a world.

acroy

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Re: Republican Tax Plan 2017
« Reply #1302 on: December 15, 2017, 02:10:47 PM »
I've not been following the details. Wow, the MSM columnists hate it. Must be great!
Child tax credit... child tax credit... child tax credit.....

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #1303 on: December 15, 2017, 02:12:07 PM »
LOL Fucking Bob Corker.  What a joke.

DarkandStormy

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Re: Republican Tax Plan 2017
« Reply #1304 on: December 15, 2017, 02:13:12 PM »
I've not been following the details. Wow, the MSM columnists hate it. Must be great!

Yes, people smarter than you who've read the bill and economists who've done the analysis says it is bad...therefore it is good.  SMH.  What idiotic "logic."

sol

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Re: Republican Tax Plan 2017
« Reply #1305 on: December 15, 2017, 02:20:26 PM »
Child tax credit... child tax credit... child tax credit.....

Do you like the new child tax credit?  You know it's supposed to go away in 2024, right?  Republicans need to raise taxes on the middle class to make their tax cut for corporations only add 1.5 trillion to the national debt, so they made the child tax credit bigger today and then smaller in the future, so the real plan is a child tax credit reduction, not expansion.

So I'm not sure if you're cheering it for going up or going down, since it is doing one and then the other.

secondcor521

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Re: Republican Tax Plan 2017
« Reply #1306 on: December 15, 2017, 02:51:40 PM »
Child tax credit... child tax credit... child tax credit.....

Do you like the new child tax credit?  You know it's supposed to go away in 2024, right?  Republicans need to raise taxes on the middle class to make their tax cut for corporations only add 1.5 trillion to the national debt, so they made the child tax credit bigger today and then smaller in the future, so the real plan is a child tax credit reduction, not expansion.

So I'm not sure if you're cheering it for going up or going down, since it is doing one and then the other.

When it "goes away" in 2024, does it revert back to current tax law ($1K/kid), or does the CTC go away entirely ($0K/kid)?  Just curious if anyone knows.

RangerOne

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Re: Republican Tax Plan 2017
« Reply #1307 on: December 15, 2017, 03:02:11 PM »
Child tax credit... child tax credit... child tax credit.....

Do you like the new child tax credit?  You know it's supposed to go away in 2024, right?  Republicans need to raise taxes on the middle class to make their tax cut for corporations only add 1.5 trillion to the national debt, so they made the child tax credit bigger today and then smaller in the future, so the real plan is a child tax credit reduction, not expansion.

So I'm not sure if you're cheering it for going up or going down, since it is doing one and then the other.

They could but again they are really just exploiting a loop hole to get around their own deficit hawks. Congress generally keeps tax breaks for the middle class because the blow back is huge otherwise.

It ties the hands of congress due to the unpopularity of allowing these to expire.

MDM

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Re: Republican Tax Plan 2017
« Reply #1308 on: December 15, 2017, 03:04:47 PM »
When it "goes away" in 2024, does it revert back to current tax law ($1K/kid), or does the CTC go away entirely ($0K/kid)?  Just curious if anyone knows.
Predicting what will actually happen to the CTC in 2024 is like predicting the S&P 500 index value: you might be correct, but only if you are lucky.

Jrr85

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Re: Republican Tax Plan 2017
« Reply #1309 on: December 15, 2017, 03:09:53 PM »
As of now, it appears that every single republican in Congress supports the tax bill.  Not a single one of them will vote against it, despite almost 70% of the country opposing it.

Flake folded.  Rubio folded.  Even Corker folded.

Let this moment stand in history, as a turning point for the republican party and for America.  Next week every single republican will unify behind the idea of raising taxes on the middle class, and spiking the national debt, in order to give tax cuts to billionaires.  Not one will remember their promises to voters, or the ideology their party used to represent.

Just a tad bit melodramatic there, aren't you?

Yes, it's possible middle class taxes will end up higher because of deficit spending now, but if deficit spending now raises middle class taxes, the additional deficit spending from this bill is the least of our worries, as all of this is noise next to entitlements and then defense spending. 

sol

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Re: Republican Tax Plan 2017
« Reply #1310 on: December 15, 2017, 03:13:07 PM »
Child tax credit... child tax credit... child tax credit.....

Do you like the new child tax credit?  You know it's supposed to go away in 2024, right?  Republicans need to raise taxes on the middle class to make their tax cut for corporations only add 1.5 trillion to the national debt, so they made the child tax credit bigger today and then smaller in the future, so the real plan is a child tax credit reduction, not expansion.

So I'm not sure if you're cheering it for going up or going down, since it is doing one and then the other.

When it "goes away" in 2024, does it revert back to current tax law ($1K/kid), or does the CTC go away entirely ($0K/kid)?  Just curious if anyone knows.

Everyone is still trying to figure this sort of thing out, but it looks like the bill says it goes back to 1k, but less will be refundable.  The doubled standard deduction reverts to today's amount, but with a lower inflation estimate so that the brackets will creep down over time for everyone, raising your rates.  And the loss of exemptions and deductions is permanent, so after the doubled standard deductible expires you'll have higher taxable income.  So not only will you pay the higher rate on more income, it will be more difficult to qualify for EITC or savers credit or anything else based on AGI.  This is all right in line with GOP priorities.

The other big kicker that nobody is talking about yet is how the changes to pass through incomes will hasten the demise of social security and Medicare.  By lowering the tax rates there they incentivize people to reclassify income as pass through owner profit instead of wages, which means reduced payroll taxes and thus reduced revenue for these programs.  Also right in line with GOP priorities.
« Last Edit: December 15, 2017, 03:17:41 PM by sol »

GoingConcern

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Re: Republican Tax Plan 2017
« Reply #1311 on: December 15, 2017, 03:25:28 PM »
Child tax credit... child tax credit... child tax credit.....

Do you like the new child tax credit?  You know it's supposed to go away in 2024, right?  Republicans need to raise taxes on the middle class to make their tax cut for corporations only add 1.5 trillion to the national debt, so they made the child tax credit bigger today and then smaller in the future, so the real plan is a child tax credit reduction, not expansion.

So I'm not sure if you're cheering it for going up or going down, since it is doing one and then the other.

There are plenty of tax provisions that set to expire every year but they are normally renewed.  It's a common practice around December when congress gets together and decides which tax provisions are renewed, and historically the majority of these provisions are renewed.

So when the taxes are set to increase in 2024 who is to say the tax cuts won't be renewed or made permanently?  I have seen you make this argument (you are not the only one some democrats do as well) disingenuously make the argument that middle class taxes will go up because when the tax cuts expire they will pay more t but it's a bit disingenuous to make that argument and not add the caveat that the tax cuts could be extended or made permanently at the time. 

Majority of middle class earners they will see a tax cut in the next few years.  Those that itemize (remember itemizer represent 30% of all filers meaning the majority of them are probably not part of the middle class but are part of the upper-middle class and above) could see a tax increase especially if their SALT deduction is large. 
« Last Edit: December 15, 2017, 03:32:44 PM by GoingConcern »

sherr

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Re: Republican Tax Plan 2017
« Reply #1312 on: December 15, 2017, 03:34:42 PM »
So when the taxes are set to increase in 2024 who is to say the tax cuts won't be renewed or made permanently?  I have seen you make this argument (you are not the only one some democrats do as well) disingenuously make the argument that middle class taxes will go up because when the tax cuts expire they will pay more then they pay currently but it's a bit disingenuous to make that argument and not add the caveat that the tax cuts could be extended or made permanently at the time. 

You're missing the point I made above. Either you have to assume to take the bill at face value (like sol is doing), or you have to assume that the "how much it will add to the deficit" numbers are bald-faced lies intended to hide how much damage this will do to the federal budget (and therefore the entitlement programs). Pick your favorite poison.

brooklynguy

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Re: Republican Tax Plan 2017
« Reply #1313 on: December 15, 2017, 03:39:22 PM »
And the loss of exemptions and deductions is permanent, so after the doubled standard deductible expires you'll have higher taxable income.  So not only will you pay the higher rate on more income, it will be more difficult to qualify for EITC or savers credit or anything else based on AGI.

I didn't follow this point the first time it was made earlier in this thread, and I still don't.  Reducing below-the-line deductions won't impact your AGI.

secondcor521

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Re: Republican Tax Plan 2017
« Reply #1314 on: December 15, 2017, 03:49:16 PM »
When it "goes away" in 2024, does it revert back to current tax law ($1K/kid), or does the CTC go away entirely ($0K/kid)?  Just curious if anyone knows.
Predicting what will actually happen to the CTC in 2024 is like predicting the S&P 500 index value: you might be correct, but only if you are lucky.

Yes, obviously things can and will change in the next 7 years.  The intent of my question was as @sol interpreted it - what would happen to the CTC solely based on the content of the current tax bill.  (Thanks, @sol.)

FIREchiefsr

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sol

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Re: Republican Tax Plan 2017
« Reply #1316 on: December 15, 2017, 03:56:02 PM »
So when the taxes are set to increase in 2024 who is to say the tax cuts won't be renewed or made permanently? 

The Republican's own tax plan, that who says.

The bill NEEDS those tax cuts to expire in order to generate revenue to help offset the cost of lowering the uppermost tax bracket.  It's the whole point of the bill, not some unintended side effect.

Like if republicans really wanted to cut taxes on the middle class, they could have just done that.  They certainly have the votes. They might have even gotten some centrists to vote with them.  But they chose NOT to do this.  They instead chose to use the middle class as a revenue generator to help pay for tax cuts for billionaires.

It seems weird that people (multiple people on this forum) have all made this same argument, that somehow it will be the democrat's fault when the republicans create, vote for, pass, and implement the republican tax plan without any dem votes.  If dems retake power and repeal this horrible bill, good for them.  But it doesn't make sense blame democrats today for potentially not doing something in the future to fix what republicans do today.

tralfamadorian

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Re: Republican Tax Plan 2017
« Reply #1317 on: December 15, 2017, 04:19:34 PM »
The S-corp benefit has been reduced significantly. 20% deduction with a exemption of $157,500/$315,000 (Single/MFJ) down from 23% 250k/500k.

jim555

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Re: Republican Tax Plan 2017
« Reply #1318 on: December 15, 2017, 05:07:36 PM »
The Individual Mandate is set to $0 after 12/31/2018 in the just released bill.

marty998

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Re: Republican Tax Plan 2017
« Reply #1319 on: December 15, 2017, 05:59:42 PM »
This thread is exhausting. Your politics is ridiculous. (As you might say with ours, but seriously, you guys take it to a whole new level).

Is America Great Again yet?

tralfamadorian

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Re: Republican Tax Plan 2017
« Reply #1320 on: December 15, 2017, 07:09:19 PM »
This thread is exhausting. Your politics is ridiculous. (As you might say with ours, but seriously, you guys take it to a whole new level).

Is America Great Again yet?

I know, right?

I already have a 20 point question list that I want to sit down with my tax professional and discuss when this thing passes. And, of course, the bill is going to go into effect for 2018 so for planning purposes, I need the information to make any changes right away- right at the start of her tax season. I'm sure all the tax CPA/EAs are going to be FML this season.  So much for streamlining the tax system.

sol

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Re: Republican Tax Plan 2017
« Reply #1321 on: December 15, 2017, 08:49:19 PM »
I am pre-paying the property taxes and I am going to pull forward my January mortgage payment into the last week of December.  Just maximizing my 2017 itemized deductions before I (presumably) will be taking the standard deduction next year.

According to the papers, the bill specifically prohibits prepaying your 2018 property taxes in 2017.  Sorry.

From https://www.nytimes.com/2017/12/15/us/politics/republican-tax-bill.html:
Quote
In a pre-emptive move against accounting maneuvers in high-tax states such as New York and California, the bill prohibits taxpayers from prepaying next year’s state and local income or property taxes, in order to deduct them from 2018 taxes. That form of tax planning would have allowed taxpayers to benefit more from the full state and local deduction this year before it is capped next year.

sol

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Re: Republican Tax Plan 2017
« Reply #1322 on: December 15, 2017, 08:52:54 PM »
And it looks like the newly expanded Rubio child tax credit, which gives a higher break to low-income workers, will only apply to kids 16 and under and thus actually costs the bill LESS money than the original version.  So they can both claim they have helped working families, and simultaneously pay out less money to working families.  I'm disgusted.

I wonder if they used some of the savings to offset lowering that top tax bracket from 39.6 to 37% 

ixtap

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Re: Republican Tax Plan 2017
« Reply #1323 on: December 15, 2017, 09:09:21 PM »
Silly question: is the SALT deduction $10k per return? ie, single or MFJ you get $10k either way? We have a new marriage penalty?

MMMarbleheader

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Re: Republican Tax Plan 2017
« Reply #1324 on: December 15, 2017, 09:10:41 PM »
fyi

http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

If the conference agreement says "no provision" does that mean nothing is changing?

On page 632 it list the home sale exemption for capital gains as "no provision" after listing the senate and house amendments.

MDM

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Re: Republican Tax Plan 2017
« Reply #1325 on: December 15, 2017, 09:40:23 PM »
I am pre-paying the property taxes and I am going to pull forward my January mortgage payment into the last week of December.  Just maximizing my 2017 itemized deductions before I (presumably) will be taking the standard deduction next year.

According to the papers, the bill specifically prohibits prepaying your 2018 property taxes in 2017.  Sorry.

From https://www.nytimes.com/2017/12/15/us/politics/republican-tax-bill.html:
Quote
In a pre-emptive move against accounting maneuvers in high-tax states such as New York and California, the bill prohibits taxpayers from prepaying next year’s state and local income or property taxes, in order to deduct them from 2018 taxes. That form of tax planning would have allowed taxpayers to benefit more from the full state and local deduction this year before it is capped next year.
It's clear how that could apply to property taxes, but it's not clear that it applies to income taxes.  E.g., normal W-2 withholding of state income tax for 2017 paychecks, or estimated tax payments directed to 2017 tax, are applied to the tax imposed for 2017.  But yes, an estimated payment directed to 2018 state income tax would not be federally deductible in 2017.

The actual bill text:
Quote
...an  amount  paid  in  a  taxable  year  beginning  before  January  1,  2018,  with  respect  to  a  State  or  local  income 
tax  imposed  for  a  taxable  year  beginning  after  December  31,  2017,  shall  be  treated  as  paid  on  the  last 
day  of  the  taxable  year  for  which  such  tax  is  so  imposed.

Not clear how much overpayment of state income tax would be allowed, but there seems no restriction other than the $10K itemized deduction limit.  And the state income tax refund for 2017 becomes federally taxable in 2018 if it was taken as a 2017 deduction - that is unchanged from previous law.

SaucyAussie

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Re: Republican Tax Plan 2017
« Reply #1326 on: December 15, 2017, 09:48:48 PM »
Nahhh, the middle and lower classes are probably protected until we have a sovereign credit crisis.  When the sunset provisions come up, it will be just like the bush tax cuts.  There will be tremendous pressure to make them permanent.  Maybe the upper bracket tax cuts will be allowed to expire.  Maybe the corporate tax rate will be rolled back (although that actually being good policy maybe not).  Maybe some more "guard rails" will be put on the ridiculous breaks for partnerships and S-Corps.  But we're not going to openly cut entitlements or openly raise taxes on the middle class unless and until it's a crisis.  Maybe some tinkering by doing something like chained CPI, maybe do some more "hidden" taxes as mandates.  But otherwise, the only thing the american electorate is united on is that they wants lots of government that somebody else pays for.

Fine but that means that the actual cost of the bill is going to be much much larger than the $1 - 1.5 Trillion advertised. Which is a requirement based on the budget they passed.

So either we assume that the tax bill represents the Republican's actual desire / plan and that sol's criticism is valid and it's pretty much just a temporary bandaid for the middle-class so they can ram through a huge permanent upper-class cut, or we assume that they really are looking out for the both but are lying in bad faith about how devastating to the federal budget (and probably therefore the entitlement programs) this plan will be. I'm honestly not sure which paints them in a worse light.

Edited to talk about "upper-class cuts" instead of "corporate cuts", since that's what sol was referring to.

Is it really lying when when everybody knows (except sol apparently) that that's exactly why they are doing it?  And they freely admit that?

SaucyAussie

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Re: Republican Tax Plan 2017
« Reply #1327 on: December 15, 2017, 10:00:28 PM »
http://taxplancalculator.com/

Nice work by this guy to get his tax calculator updated already.  A few tweaks during the week made it a little better for most, especially regarding the child tax credit and another shift in the brackets.

I'm curious as to how payroll departments are going to handle this.  I assume the IRS will have to create a modified W4 and everyone will need to submit a new one.  I wonder how long until we see the change in our paychecks.

FIREchiefsr

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Re: Republican Tax Plan 2017
« Reply #1328 on: December 15, 2017, 10:34:55 PM »
http://taxplancalculator.com/

Nice work by this guy to get his tax calculator updated already.  A few tweaks during the week made it a little better for most, especially regarding the child tax credit and another shift in the brackets.

I'm curious as to how payroll departments are going to handle this.  I assume the IRS will have to create a modified W4 and everyone will need to submit a new one.  I wonder how long until we see the change in our paychecks.

You can see the change in your paycheck any time you want to.  Just submit a new W4 to raise or lower your withholding. 

sherr

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Re: Republican Tax Plan 2017
« Reply #1329 on: December 15, 2017, 11:38:46 PM »
Nahhh, the middle and lower classes are probably protected until we have a sovereign credit crisis.  When the sunset provisions come up, it will be just like the bush tax cuts.  There will be tremendous pressure to make them permanent.  Maybe the upper bracket tax cuts will be allowed to expire.  Maybe the corporate tax rate will be rolled back (although that actually being good policy maybe not).  Maybe some more "guard rails" will be put on the ridiculous breaks for partnerships and S-Corps.  But we're not going to openly cut entitlements or openly raise taxes on the middle class unless and until it's a crisis.  Maybe some tinkering by doing something like chained CPI, maybe do some more "hidden" taxes as mandates.  But otherwise, the only thing the american electorate is united on is that they wants lots of government that somebody else pays for.

Fine but that means that the actual cost of the bill is going to be much much larger than the $1 - 1.5 Trillion advertised. Which is a requirement based on the budget they passed.

So either we assume that the tax bill represents the Republican's actual desire / plan and that sol's criticism is valid and it's pretty much just a temporary bandaid for the middle-class so they can ram through a huge permanent upper-class cut, or we assume that they really are looking out for the both but are lying in bad faith about how devastating to the federal budget (and probably therefore the entitlement programs) this plan will be. I'm honestly not sure which paints them in a worse light.

Edited to talk about "upper-class cuts" instead of "corporate cuts", since that's what sol was referring to.

Is it really lying when when everybody knows (except sol apparently) that that's exactly why they are doing it?  And they freely admit that?

I don't know, you tell me. Are they lying about how much the bill will cost? How much will it cost then? Is there any way to estimate it? Is literally any agency or organization on the face of the planet estimating how much it will cost assuming that the Republicans are lying about the phase-outs?

dragoncar

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Re: Republican Tax Plan 2017
« Reply #1330 on: December 16, 2017, 01:31:21 AM »
The county where I live has just opened up their website for pre-payment of next year's property taxes (in anticipation of the tax bill passing, and at the request of many taxpayers here.)

I am pre-paying the property taxes and I am going to pull forward my January mortgage payment into the last week of December.  Just maximizing my 2017 itemized deductions before I (presumably) will be taking the standard deduction next year.

What are the mechanics of paying your January’s mortgage in December?  I though a late-December payment would just be counted as principle pay down and not pay off any accrued interest (is the deductible part)

sokoloff

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Re: Republican Tax Plan 2017
« Reply #1331 on: December 16, 2017, 03:24:45 AM »
The county where I live has just opened up their website for pre-payment of next year's property taxes (in anticipation of the tax bill passing, and at the request of many taxpayers here.)

I am pre-paying the property taxes and I am going to pull forward my January mortgage payment into the last week of December.  Just maximizing my 2017 itemized deductions before I (presumably) will be taking the standard deduction next year.
What are the mechanics of paying your January’s mortgage in December?  I though a late-December payment would just be counted as principle pay down and not pay off any accrued interest (is the deductible part)
Send a check marked "January 2018 payment" (or send with the January coupon).

My experience is that any payment of the monthly size posted the back half of the month is treated as the next month's payment without any instruction on my part.

It seems like the bill is going to (try to) disallow any benefit from doing this.

AdrianC

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Re: Republican Tax Plan 2017
« Reply #1332 on: December 16, 2017, 06:38:08 AM »
http://taxplancalculator.com/

Nice work by this guy to get his tax calculator updated already.  A few tweaks during the week made it a little better for most, especially regarding the child tax credit and another shift in the brackets.

That is nice. Thanks.

For a family with three kids making $100k in Ohio, they come out maybe $2k ahead. $75k/1.5k. $50k/$1.3k. A lot of folks around here are going to like that.

Yes, it's temporary. They get shafted once the kids turn 17 and/or the new provisions sunset in 2025. Still, it's not looking like the average Trumper around here will see this as a negative.

For a couple married filing jointly with no kids it doesn't work out so well. $100k income saves $871, $75k saves $322, $50k loses $260. That $50k cohort probably includes a bunch of Trumpers.

Anyone know if kids over 16 will count as dependents? We lose the exemption for them, currently allowed up to age 24 if they're full time at school.
« Last Edit: December 16, 2017, 06:53:17 AM by AdrianC »

MMMarbleheader

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Re: Republican Tax Plan 2017
« Reply #1333 on: December 16, 2017, 06:45:39 AM »
Funny when I lived in a lower cost of living area of the state (also made less) I would have gotten a much bigger cut even though under the current tax plan I pay less taxes than I did in the lower cost of living location because of mortgage interest and being able to max out retirement plans.

If I was able to work remotely ina cheap area I would have a negative tax burden with the expanded credit.

Still a crap sandwich of a bill

Pizzabrewer

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Re: Republican Tax Plan 2017
« Reply #1334 on: December 16, 2017, 06:52:15 AM »
Is there anything in the final version that changes the contribution limits, deductibility or funding deadlines for 401k, IRA or HSA?

Thanks.

Fomerly known as something

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Re: Republican Tax Plan 2017
« Reply #1335 on: December 16, 2017, 06:58:46 AM »
Well the last minute change to allow any SALT tax up to $10,000 changed my meh there is a tax bill to me getting a decent temporary cut.  Actually I'll be RE by the time stuff sunsets so "I GOT MINE."

But I still think this bill is a disaster for the future because it will lead to major budget problems.

Panly

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Re: Republican Tax Plan 2017
« Reply #1336 on: December 16, 2017, 07:00:09 AM »

sounds like awful policy, excellent politics. 

jim555

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Re: Republican Tax Plan 2017
« Reply #1337 on: December 16, 2017, 07:02:26 AM »
Anyone know if the first in first out (FIFO) rule was put in?  Hope not.

JustGettingStarted1980

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Re: Republican Tax Plan 2017
« Reply #1338 on: December 16, 2017, 07:28:16 AM »
$6000 in Child Tax Credits ( I have 3 kids) x 7 years (2018 through sunset 2025) = $42000 in Federal Taxes I don't have to pay.

This will accelerate my FIRE saving by $500/month.

This is ridiculously terrible policy. Who cares how many children I have? Why should the Federal Government incentive baby making? Why is the cut-off to qualify for Child Credits so high? Does someone making >500K (not me) per year really need an extra 6 K in Federal Tax Credits?

All this is is smoke and mirrors to pacify (mollify) the middle class and upper middle class so voters will "go along to get along". This will be followed by a Cliff in 2025 that will be blamed on the Democrats.

JGS
« Last Edit: December 16, 2017, 07:45:14 AM by JustGettingStarted1980 »

Jrr85

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Re: Republican Tax Plan 2017
« Reply #1339 on: December 16, 2017, 07:32:07 AM »
$6000 in Child Tax Credits ( I have 3 kids) x 7 years (2018 through sunset 2025) = $42000 in Federal Taxes I don't have to pay.

This will accelerate my FIRE saving by $500/month.

This is ridiculously terrible policy. Who cares how many children I have? Why should the Federal Government incentive baby making? Why is the cut-off to qualify for Child Credits so high? Does someone making >500K (not me) per year really need an extra 6 K in Federal Tax Credits?

All this is is smoke and mirrors to pacify (mollify) the middle class and upper middle class so voters will "get along to go along". This will be followed by a Cliff in 2025 that will be blamed on the Democrats.

JGS

The government cares because our entire government spending philosophy is to promise benefits now that future taxpayers will pay for. Somebody has to actually provide the future taxpayers to screw, so it's in the governments best interest that people get some relief for providing future tax payers.

SaucyAussie

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Re: Republican Tax Plan 2017
« Reply #1340 on: December 16, 2017, 07:47:06 AM »
Is there anything in the final version that changes the contribution limits, deductibility or funding deadlines for 401k, IRA or HSA?

Thanks.

fyi

http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

There are some tweaks to retirement accounts but I don't see anything specific to your question.  You can take a look at the referenced PDF, starting at page 636.

One thing that looks like made it in to the final bill - 401k loans will not become due within 60 days of termination of employment, instead you would have until the due date of filing your tax return.  So if employment terminates on Jan 1, 2018, you would have until April 15, 2019 to repay the loan.  This seems like common sense.

SaucyAussie

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Re: Republican Tax Plan 2017
« Reply #1341 on: December 16, 2017, 07:56:42 AM »
$6000 in Child Tax Credits ( I have 3 kids) x 7 years (2018 through sunset 2025) = $42000 in Federal Taxes I don't have to pay.

This will accelerate my FIRE saving by $500/month.

This is ridiculously terrible policy. Who cares how many children I have? Why should the Federal Government incentive baby making? Why is the cut-off to qualify for Child Credits so high? Does someone making >500K (not me) per year really need an extra 6 K in Federal Tax Credits?

All this is is smoke and mirrors to pacify (mollify) the middle class and upper middle class so voters will "go along to get along". This will be followed by a Cliff in 2025 that will be blamed on the Democrats.

JGS

This is not really a change in policy, but more just a change in the mechanics of the law.  Remember, the $4000 dependent exemption was repealed, so to offset this, the child credit was increased by $1000.  So a theoretical average taxpayer in the 25% bracket could come out even, losing the exemption (4000 x.25) but gaining it back in the form of the child credit.

Of course, depending on your specific situation, you may come out better or worse under the new law.  For example, the higher phase out is huge bonus to middle-upper income earners who received no credit before, but now receive the full 2000/child.

radram

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Re: Republican Tax Plan 2017
« Reply #1342 on: December 16, 2017, 08:06:21 AM »
http://taxplancalculator.com/

Nice work by this guy to get his tax calculator updated already.  A few tweaks during the week made it a little better for most, especially regarding the child tax credit and another shift in the brackets.

That is nice. Thanks.

For a family with three kids making $100k in Ohio, they come out maybe $2k ahead. $75k/1.5k. $50k/$1.3k. A lot of folks around here are going to like that.

Yes, it's temporary. They get shafted once the kids turn 17 and/or the new provisions sunset in 2025. Still, it's not looking like the average Trumper around here will see this as a negative.

For a couple married filing jointly with no kids it doesn't work out so well. $100k income saves $871, $75k saves $322, $50k loses $260. That $50k cohort probably includes a bunch of Trumpers.

Anyone know if kids over 16 will count as dependents? We lose the exemption for them, currently allowed up to age 24 if they're full time at school.

Someone please correct me if I am wrong.

With no personal exemptions anymore, there is no longer any advantage to claim them as dependents. Anyone see anything in this new bill to prevent all families to claim 0 children, hire them to do jobs around the house, and then have them all file their own tax return, regardless of age? Wouldn't they each get a $12,000 deduction. Seems doing this would then allow a family of 4 to have $48,000 of income tax free. Even if you would lose the child tax credit (that will just go away anyway), wouldn't the family be better off?

brooklynguy

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Re: Republican Tax Plan 2017
« Reply #1343 on: December 16, 2017, 08:18:48 AM »
Anyone know if the first in first out (FIFO) rule was put in?  Hope not.

On page 375 of the conference report, it says this was not included in the bill.

sherr

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Re: Republican Tax Plan 2017
« Reply #1344 on: December 16, 2017, 08:19:31 AM »
Someone please correct me if I am wrong.

With no personal exemptions anymore, there is no longer any advantage to claim them as dependents. Anyone see anything in this new bill to prevent all families to claim 0 children, hire them to do jobs around the house, and then have them all file their own tax return, regardless of age? Wouldn't they each get a $12,000 deduction. Seems doing this would then allow a family of 4 to have $48,000 of income tax free. Even if you would lose the child tax credit (that will just go away anyway), wouldn't the family be better off?

Assuming that you are actually paying them for work and it's actually their money afterwards then yes you're probably right, you'd be giving up the Child Tax Credit though. Just claiming it on your taxes without it actually being true would be criminal tax evasion. The IRS might be interested in what a 2-year-old could do to command a $12,000 salary.

https://quickbooks.intuit.com/r/hr-laws-and-regulation/the-tax-implications-of-hiring-your-children/

Quote
The tax benefits for hiring your kids can be substantial, which means there’s lots of potential for abuse. There’s nothing wrong with employing your kids, but you may face additional scrutiny from the IRS if you do. Attorney Stephen Fishman recommends that you maintain payroll documentation and records to prove that your children are bona fide employees. Be realistic about your their skills and compensation as well. The IRS isn’t likely to believe that a 14-year-old is doing your accounting, and it will keep an eye out for an unreasonably high pay rate.

That's not really that different from today's state of affairs, except that there's slightly less incentive to claim them as dependents if the exemptions go away.

maizefolk

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Re: Republican Tax Plan 2017
« Reply #1345 on: December 16, 2017, 08:20:32 AM »
First problem: Generally you cannot deduct the cost of hiring folks to do yardwork or clean the house from your own income.
Second problem: If the kid is earning $12,000 in self employment income and claiming it on a tax return, they'd owe an awful lot in self employment tax (15.3%)

sol

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Re: Republican Tax Plan 2017
« Reply #1346 on: December 16, 2017, 08:46:35 AM »
Is literally any agency or organization on the face of the planet estimating how much it will cost assuming that the Republicans are lying about the phase-outs?

Um, literarlly every agency?

You seem confused on this point.  Every single analysis of the bill conducted by a government agency has to, by law, assume that the bill will be implemented as written.  They cannot offer any analysis of hypothetical changes to the bill in the future, only of what it actually says in its current form.

Then there are some think tanks that offer analysis based on their wish lists or fears.  Those have generally said the bill costs 2-3 trillion over the long term, due to increased interest on the newly created debt.

sherr

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Re: Republican Tax Plan 2017
« Reply #1347 on: December 16, 2017, 09:03:16 AM »
Is literally any agency or organization on the face of the planet estimating how much it will cost assuming that the Republicans are lying about the phase-outs?

Um, literarlly every agency?

You seem confused on this point.  Every single analysis of the bill conducted by a government agency has to, by law, assume that the bill will be implemented as written.  They cannot offer any analysis of hypothetical changes to the bill in the future, only of what it actually says in its current form.

Then there are some think tanks that offer analysis based on their wish lists or fears.  Those have generally said the bill costs 2-3 trillion over the long term, due to increased interest on the newly created debt.

That was in fact my point. No one is estimating based on theoretical changes that might happen in the future.

tralfamadorian

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Re: Republican Tax Plan 2017
« Reply #1348 on: December 16, 2017, 09:16:34 AM »
Is there anything in the final version that changes the contribution limits, deductibility or funding deadlines for 401k, IRA or HSA?

Thanks.

fyi

http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

There are some tweaks to retirement accounts but I don't see anything specific to your question.  You can take a look at the referenced PDF, starting at page 636.

One thing that looks like made it in to the final bill - 401k loans will not become due within 60 days of termination of employment, instead you would have until the due date of filing your tax return.  So if employment terminates on Jan 1, 2018, you would have until April 15, 2019 to repay the loan.  This seems like common sense.

Changes that I can identify so far:

1) Roth recharacterizations will no longer be allowed but other recharacterizations will. (pg. 639)
2) Loan repayment changes as stated by SaucyAussie. (pg. 645)

sol

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Re: Republican Tax Plan 2017
« Reply #1349 on: December 16, 2017, 09:22:13 AM »
That was in fact my point. No one is estimating based on theoretical changes that might happen in the future.

Perhaps I misunderstood.  Do you think republicans are lying when they say the bill will only add 1.5 trillion in new debt, or do you thimk they are lying when they say the middle class tax cuts will be made permanent?

Because if one of those things is true, then the other one isn't.  I've been assuming that they wrote the bill they wanted to see implemented, to screw the middle class but add less debt.  Some other folks seem to think they want a different bill, one that is nicer to the middle class but screws the national debt.

In either case, corporations and the super wealthy are making out great, so that's clearly their first property with this bill.  Then way lower down is the debate about who we should screw over to make that happen.  Should it be today's middle class, or tomorrow's future taxpayers (who may also be the middle class)?
« Last Edit: December 16, 2017, 09:25:28 AM by sol »