Author Topic: SALT Deduction  (Read 6563 times)

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Offline morekaos

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Re: SALT Deduction
« Reply #30 on: January 28, 2019, 03:33:47 PM »
No, currently the changes to AMT and the lower brackets offset the loss of SALT. All things being equal, if  they bring back the SALT deductions then it would lower our taxes more.

Offline Mety

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Re: SALT Deduction
« Reply #31 on: January 28, 2019, 03:42:54 PM »
No, currently the changes to AMT and the lower brackets offset the loss of SALT. All things being equal, if  they bring back the SALT deductions then it would lower our taxes more.


Offline woodburyowner

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Re: SALT Deduction
« Reply #32 on: January 28, 2019, 04:30:34 PM »
OK, did my taxes over the weekend and spent the day with my CPA.  As I suspected and as he told me last year...TAX CUT.  I will not share specifics but his explanation was that the brackets were not only lowered but widened,  AMT reduction, and higher child credits helped immensely.  My mortgage interest write off remained the same as my mortgage is grandfathered in and under $750k anyway.  He has done over 25 returns already and the results were much the same.  Even with the elimination of SALT my tax refund increased nicely.  Thank you Mr. President!!

Sounds about right.  Most people don't understand how taxes work and just take a few talking points out of context. I'm confident my taxes will go down as well. 

It would be interesting to see in which hypothetical scenarios someones tax liability will go up with the new tax law.    I'm guessing they will be very atypical scenarios.  Anyone care to take a stab at it?

Think if you live in a high tax state (Cali, NY) are a super high income earner (>$1M/year) and you have a high value property (>$1M taxable) and you have a significant mortgage (>$750k)  you are gonna take a hit.

Isn't this the profile of a wealthy individual?  I thought the tax cut only was only for the rich!? 

All kidding aside, I think this person's liability would go down with the tax cut due to the shifted income brackets. 

Offline eyephone

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Re: SALT Deduction
« Reply #33 on: January 28, 2019, 05:01:07 PM »
Also, we don’t know if he his business through a LLC.
With a Lower tax rate.


Offline morekaos

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Re: SALT Deduction
« Reply #34 on: January 28, 2019, 08:26:56 PM »
Let’s say you make $2 million a year (w2), you are in the highest bracket, additionally, you just bought a $3 million dollar home ($35000.00 prop tax bill, $25000 in excess of your $10k limit). Let’s say you financed it (stupid but let’s say you got a $2m mortgage) you can now only write off the interest on the first $750k so that doesn’t help much. In this specific case without the SALT you probably would see your taxes rise but this guy is not atypical at all.
« Last Edit: January 28, 2019, 09:11:52 PM by morekaos »

Offline Cares

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Re: SALT Deduction
« Reply #35 on: January 29, 2019, 09:58:18 AM »
Just curious and because I'm too lazy to do the research, is the $750k limit on TOTAL loans? Or if I have more than that spread across properties but all less then $750k I can deduct the full amount?

Offline eyephone

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Re: SALT Deduction
« Reply #36 on: January 29, 2019, 10:36:41 AM »
Also, we don’t know if he his business through a LLC.
With a Lower tax rate.

It’s all relative to Morekas statement. We really don’t know if he runs the income through his own company with a lower tax rate than regular W2 earners. (Just keep that in mind)

Offline morekaos

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Re: SALT Deduction
« Reply #37 on: January 29, 2019, 10:48:41 AM »
I w2 it if you really care. The limit is $750k on the primary loan and I think it is up to $100k on a HELOC.

Offline eyephone

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Re: SALT Deduction
« Reply #38 on: January 29, 2019, 11:10:58 AM »
I w2 it if you really care. The limit is $750k on the primary loan and I think it is up to $100k on a HELOC.

Don’t you get a 1099? (Sell investment products)

Offline Irvinecommuter

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Re: SALT Deduction
« Reply #39 on: January 29, 2019, 11:17:59 AM »
This whole discussion is pointless because we will have the data soon enough...Morekaos' individual return is irrelevant.

Meanwhile, the point of the tax cuts was not to give rich people more money back...it was to spurn growth and hiring...and yet...nothing.

Quote
The Trump administration’s $1.5 trillion in tax cuts appears to have not made any major impact on businesses’ capital investment or hiring plans, according to a new survey.

A quarterly poll from the National Association for Business Economics published Monday found that some companies reported accelerating investments because of lower corporate taxes, but a whopping 84% of respondents said they had not changed their plans. That’s up slightly from 81% in the previous survey published in October, Reuters reports.

The White House had said the massive stimulus package, which cut the corporate tax rate to 21% from 35%, would boost business spending and job growth. The tax cuts that came into effect in January 2018 were the biggest overhaul of the U.S. tax code in more than 30 years.

http://fortune.com/2019/01/28/trump-tax-reform-hiring-investment/

https://www.pbs.org/newshour/economy/making-sense/did-trumps-tax-cuts-boost-hiring-most-companies-say-no

Meanwhile, our deficit has jumped 17% in 2018 ($779 billion).   

Offline morekaos

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Re: SALT Deduction
« Reply #40 on: January 29, 2019, 12:06:35 PM »
I w2 it if you really care. The limit is $750k on the primary loan and I think it is up to $100k on a HELOC.

Don’t you get a 1099? (Sell investment products)

Yah, I get one for my portfolio.

Offline daedalus

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Re: SALT Deduction
« Reply #41 on: April 13, 2019, 10:32:38 AM »
Our data point:  Our AGI was slightly higher in 2018 vs 2017, and we paid 7.7% less in federal tax (as a percentage of total tax paid for 2017).    Our taxable income was a good bit higher and we have 1 child.  No noteworthy changes to our situation.  I didn't like seeing our Schedule A deductions fall off a cliff, but I won't complain about paying less in tax at the end of the day.   *this is going off my tax guy's headline #s, subject to my review. 

I am the guy who targets 0 owe/0 refund with my W4s, but I forgot about having pulled our prop taxes ahead in Dec of 2017.  So I shot myself in the foot with our state taxes for 2018 because now we owe based on that.

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Offline daedalus

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Re: SALT Deduction
« Reply #42 on: April 13, 2019, 10:39:05 AM »
Something that concerns me about the new tax system is that with the larger standard deduction, more people will not get a tax break for donating to charities.  Anyone who itemized before but who now claims the standard deduction will have not have the fed govt as a donating partner to soften the blow of their philanthropy.

Offline woodburyowner

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Re: SALT Deduction
« Reply #43 on: April 14, 2019, 11:19:25 AM »
My data point - AGI went up 3.3% vs 2017.  Tax liability went down 10.5% (2017 total tax paid vs. 2018 total tax paid) even though my income went up .  Pretty significant savings for me.  Main factors for the decrease in liability are expanded tax bracket, new child care credit, and change in AMT (essentially removing it).  I am still itemizing although the deductions are significantly lower now. 

Offline morekaos

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Re: SALT Deduction
« Reply #44 on: April 15, 2019, 10:23:00 AM »
#winning, even the New York Times has to admit the truth every once in a while.

Face It: You (Probably) Got a Tax Cut
Studies consistently find that the 2017 law cut taxes for most Americans. Most of them don’t buy it.

If you’re an American taxpayer, you probably got a tax cut last year. And there’s a good chance you don’t believe it.

Ever since President Trump signed the Republican-sponsored tax bill in December 2017, independent analyses have consistently found that a large majority of Americans would owe less because of the law. Preliminary data based on tax filings has shown the same.

Yet as the first tax filing season under the new law wraps up on Monday, taxpayers are skeptical. A survey conducted in early April for The New York Times by the online research platform SurveyMonkey found that just 40 percent of Americans believed they had received a tax cut under the law. Just 20 percent were certain they had done so. That’s consistent with previous polls finding that most Americans felt they hadn’t gotten a tax cut, and that a large minority thought their taxes had risen — though not even one in 10 households actually got a tax increase.

https://www.nytimes.com/2019/04/14/business/economy/income-tax-cut.html

 

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