SALT Deduction
- Thread starter DrTravel
- Start date
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.
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.
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.
woodburyowner
Well-known member
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.
morekaos
Well-known member
#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
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
Irvinecommuter
New member
morekaos said:
I love that the fight is where "people actually got a tax break"...you understand that this is a political issue, which means people's perception is 90% of the battle. If people don't feel like they are benefiting from the tax break...it's a lost cause. The tax break was supposed to be the big thing that the GOP ran on for the midterm because they frontloaded the savings...that clearly didn't work.
Also..what was the effects of the tax breaks? Despite all the rhetoric, Trump still has not hit that magical 3% GDP annual growth mark and with the tax cut sugar high going away...it's not likely to do that in the foreseeable future. Meanwhile, deficit way up and revenues way down...where is the beef?
https://www.bloomberg.com/news/arti...-monthly-budget-deficit-on-record-in-february
Irvinecommuter
New member
I paid about the same but again what exactly is the big picture plan for the tax cut? Where is the 4% growth for 10 years?
morekaos
Well-known member
eyephone said:
Reality is this did not happen...more fake news that was pounded into their heads non-stop just like "Russia, Russia, Russia" that turns out to be untrue. Don't think the public does not notice this pattern. Reality eventually Trumps perception, this will be no different.
irvinehomeowner
Well-known member
I'm confused.
I guess I should try to figure this out, we hit the SALT limit (as would about anyone who pays excess of 10k property tax in Irvine).
Our AGI is about 10% higher than 2017, but our taxable income is 33% higher than 2018 (no dependent exemptions and about 20% less itemized deductions).
But our taxes is only 10% higher (I guess the child credit and no AMT helped?).
So I guess it's a wash for us? Maybe I should start a new return in the 2017 software and see where that falls to get a better idea of the differences.
I guess I should try to figure this out, we hit the SALT limit (as would about anyone who pays excess of 10k property tax in Irvine).
Our AGI is about 10% higher than 2017, but our taxable income is 33% higher than 2018 (no dependent exemptions and about 20% less itemized deductions).
But our taxes is only 10% higher (I guess the child credit and no AMT helped?).
So I guess it's a wash for us? Maybe I should start a new return in the 2017 software and see where that falls to get a better idea of the differences.
woodburyowner
Well-known member
irvinehomeowner said:
Why not just look at your effective tax rate difference between 2017 and 2018? For 2018, Line 15 divided by Line 7. For 2017, Line 63 divided by Line 22.
irvinehomeowner
Well-known member
woodburyowner said:
Thanks. I was more talking about the differences in the bracket, deductions, exemptions, credits, AMT etc.
Using tax divided by income, for 2017 I get 11.1% and for 2018 I get... 11.2%.
Man... Trump got me for .1% higher taxes.
morekaos said:
Vox article: Trump?s fake tax cuts are dead
The midterms are over, and so are Republicans? phantom middle-class tax cuts.
Trump raised eyebrows in October when he suddenly began to talk about a 10 percent tax cut for the middle class that would be passed ahead of the midterms. He told reporters in Nevada that he was working on a ?very major tax cut for middle-income people? and that the White House and congressional leaders were ?studying very deeply, round the clock? on something to be announced very soon ? certainly ahead of the elections.
No one seemed to have any idea what he was talking about: There was no discernible plan in the works, and his aides reportedly had no idea what was going on. Congress wasn?t even in session. (When a reporter pointed it out to Trump, he said the vote would be after the election, but the proposal would be released beforehand.)
https://www.vox.com/policy-and-politics/2018/11/15/18097418/trump-middle-class-tax-cuts-larry-kudlow
campaigning additional tax cuts, but the bill was not even brought up
irvinehomeowner said:woodburyowner said:
Thanks. I was more talking about the differences in the bracket, deductions, exemptions, credits, AMT etc.
Using tax divided by income, for 2017 I get 11.1% and for 2018 I get... 11.2%.
Man... Trump got me for .1% higher taxes.
0.1% increase when your agi increased 10%? sounds like a win to me
Irvinecommuter
New member
Kings said:irvinehomeowner said:woodburyowner said:
Thanks. I was more talking about the differences in the bracket, deductions, exemptions, credits, AMT etc.
Using tax divided by income, for 2017 I get 11.1% and for 2018 I get... 11.2%.
Man... Trump got me for .1% higher taxes.
0.1% increase when your agi increased 10%? sounds like a win to me
Why would that be a win..it's literally the same unless they went up a bracket
They didn't pay the same amount...they paid the same effective rate.
Irvinecommuter
New member
BTW: Political failure for Trump and GOP.
https://thehill.com/hilltv/what-ame...-of-americans-say-theyre-paying-less-in-taxes
Irvinecommuter said:Kings said:irvinehomeowner said:woodburyowner said:
Thanks. I was more talking about the differences in the bracket, deductions, exemptions, credits, AMT etc.
Using tax divided by income, for 2017 I get 11.1% and for 2018 I get... 11.2%.
Man... Trump got me for .1% higher taxes.
0.1% increase when your agi increased 10%? sounds like a win to me
Why would that be a win..it's literally the same unless they went up a bracket
They didn't pay the same amount...they paid the same effective rate.
if my agi last year is $150k and my effective tax rate is 10%, and the next year i make $165k (10% more), and my effective tax rate is still 10%, then that's a win because without the trump tax plan your effective rate would increase because a larger percentage of your income is going to be taxed at the marginal rate from that bracket.
Tax foundation article: Which States Rely the Most on Federal Aid?
The map below shows the extent to which federal aid comprised each state?s total general revenue in FY 2016 (the most recent year of data available). That year, the states where federal aid comprised the largest share of general revenue were Mississippi (43.4 percent), Louisiana (42.7 percent), New Mexico (41.2 percent), Arizona (41.2 percent), and Kentucky (40.9 percent). The states for which federal aid comprised the smallest share of state general revenue were Virginia (21.1 percent), Hawaii (22.7 percent), Kansas (23.0 percent), North Dakota (23.8 percent), and Utah (25.7 percent).
https://taxfoundation.org/federal-aid-reliance-rankings/
My comment: Note this is a 2019 article fr the tax foundation that analysis FY2016 data. Look at the states that rely on federal aid.
So I was right. The cards are stacked against us. We pay more and we don?t receive aid like other states! We were singled out to pay for other states benefits!!!!!!
The map below shows the extent to which federal aid comprised each state?s total general revenue in FY 2016 (the most recent year of data available). That year, the states where federal aid comprised the largest share of general revenue were Mississippi (43.4 percent), Louisiana (42.7 percent), New Mexico (41.2 percent), Arizona (41.2 percent), and Kentucky (40.9 percent). The states for which federal aid comprised the smallest share of state general revenue were Virginia (21.1 percent), Hawaii (22.7 percent), Kansas (23.0 percent), North Dakota (23.8 percent), and Utah (25.7 percent).
https://taxfoundation.org/federal-aid-reliance-rankings/
My comment: Note this is a 2019 article fr the tax foundation that analysis FY2016 data. Look at the states that rely on federal aid.
So I was right. The cards are stacked against us. We pay more and we don?t receive aid like other states! We were singled out to pay for other states benefits!!!!!!