How Many Got Screwed by the New Tax Laws?

[fishgutzy]

How Many Got Screwed by the New Tax Laws?

Ourselves and two friends all owe. We will be itemizing medical expenses and hope to break even.

t

Only those expenses that exceed 10% of AGI are deductible. Used to be 7.5% before Obamacare.
Whether or not one got a refund is not the right question. Was your tax paid lower or higher?
My brother and his wife will pay more. They live in a high tax town in high tax MA, in a high value home. So they will limit out on SALT and the mortgage interest deduction. Their combined income is pretty high (my brother's has to be publicly reported). You'd never know it from the cars in the driveway because they are practical. Hondas an a Nissan Frontier Pickup. Their one extravagance is the wine cellar.

 

[strangenh]

If you mean, "why aren't federal taxes deductible on your state return?", well, in excel it would be a 'circular link' and be unresolvable without calculus; that makes it kind of a non-starter for tax policy.

No, I don't mean that. I don't mean strawman versions of my statements. Thanks for playing.

 

[milktree]

No, I don't mean that. I don't mean strawman versions of my statements. Thanks for playing.

That wasn't a strawman argument because I didn't assert your meaning. I *asked* if that's what you meant. Note the word "if".

Clearly you didn't and I misunderstood. What did you mean?

 

[strangenh]

I meant, and I am pretty sure this was clear, that if it was all so neutral as to just be avoiding double taxation, the states would be proposing deductions for the federal tax hit over the SALT line, rather than trying to simply find ways to have the same tax not count as SALT. It certainly doesn't need to happen in the ridiculous way you proposed, I mean "asked" if I meant (and then answered as if I did).

So let's be more to the point: If this was neutrally about double-taxation, the states' proposed ways to remove the double-taxation would include removing the money from double-taxation through means other than just figuring out ways to dodge it.

 

[AHM]

The optimum return is Zero dollars. You never want them holding your money.

Back in Full Obamacare days, you wanted to have to owe a little money,
because refunds could be confiscated as a penalty
for non-confirming medical insurance,
but they couldn't collect extra if you already owed money.

 

[DitchDigger]

What tax law isn’t screwing you ?

 

[enbloc]

Paid $0 State and $0 Federal taxes for 2018.

 

[jamison55]

Self employed here...I paid less than half of what I paid last year. My jaw dropped when I saw how low the bill was...the lowest it’s been in the last decade since I actually started making a living at this. I couldn’t be happier!

 

[Hardwired]

Self employed here...I paid less than half of what I paid last year. My jaw dropped when I saw how low the bill was...the lowest it’s been in the last decade since I actually started making a living at this. I couldn’t be happier!

What helped? Tax rate or some new deduction?
They nail one with Self Employment tax when my wife was getting paid as a contractor.

The 10k salt limit with rising property taxes is penalizing home owners.. Wyoming looks pretty good in comparison.

 

[fshalor]

I sort of got screwed. Ended up owning around $2k when I was expecting to owe nil to fed and 200 to state.

The 24k standard deduction made it easier. But the if it was 12k and 7.5% of AGI, I'd have gotten 1k back.

Effective tax rate went up slightly. Difference in net to my pocket was around 0.5% of my total income.

So not complaining. Already adjusted for next year.

 

[Bt74]

Still itemized, and got a bigger return than expected, thought I might owe. My buddy OWED better than $5k.....but it turns out he went exempt for 6 months, then the dummy claimed Married w/6 dependents! He was divorced last year, and all his kids are too old to be claimed.

 

[majspud]

Final Result:

58 refund
6 even
35 owe

We're currently itemizing, and hope to break even.

t

 

[Mountain]

Only those expenses that exceed 10% of AGI are deductible. Used to be 7.5% before Obamacare.
Whether or not one got a refund is not the right question. Was your tax paid lower or higher?
My brother and his wife will pay more. They live in a high tax town in high tax MA, in a high value home. So they will limit out on SALT and the mortgage interest deduction. Their combined income is pretty high (my brother's has to be publicly reported). You'd never know it from the cars in the driveway because they are practical. Hondas an a Nissan Frontier Pickup. Their one extravagance is the wine cellar.

Wife and I are in a similar position this year. Prior deduction limits plus hitting the new SALT ceiling has screwed us over this year. Trump's F-U to states with higher state income taxes and higher property taxes (generally 'blue' states) is working, at the expense of the upper-middle and higher income classes. I did the math and determined that already we were paying taxes at a rate higher than we would pay if I lived in Shanghai, China. Socialist level taxes without the socialist benefits. Now it's worse. F all politicians, including Trump. I have to laugh at all the douchebags who think Trump is screwing the 'little guy'. The middle-middle and lower should benefit from his new tax structure. The Dims will figure this out and likely will continue to fleece those of us who are taking it in the bum, plus will add on more pain for everyone except their primary base of voters (non earners?).

 

[fishgutzy]

Wife and I are in a similar position this year. Prior deduction limits plus hitting the new SALT ceiling has screwed us over this year. Trump's F-U to states with higher state income taxes and higher property taxes (generally 'blue' states) is working, at the expense of the upper-middle and higher income classes. I did the math and determined that already we were paying taxes at a rate higher than we would pay if I lived in Shanghai, China. Socialist level taxes without the socialist benefits. Now it's worse. F all politicians, including Trump. I have to laugh at all the douchebags who think Trump is screwing the 'little guy'. The middle-middle and lower should benefit from his new tax structure. The Dims will figure this out and likely will continue to fleece those of us who are taking it in the bum, plus will add on more pain for everyone except their primary base of voters (non earners?).

Shanghai, 18% off the top. No deductions. No free stuff. No free healthcare. Chinese "health insurance" doesn't cover medicines (They don't have "prescription medicine" the way we do). Extremely expensive housing. $15,000 just to register a car. A typical apartment doesn't have an actual kitchen. In fact most of the apartments I stayed at in Shanghai had a single plugin style cook top. And I had to share the apartment with 4 to 5 strangers because the company is too cheap to pay for a privacy.

 

[kevin9]

...Socialist level taxes without the socialist benefits...

By "socialist benefits" I assume you mean little/no food on the shelves, limited consumer merchandise that's at best 3rd world quality, minimal and rationed health care, tiny substandard assigned housing, etc., etc., etc. .

 

[Mountain]

Shanghai, 18% off the top. No deductions. No free stuff. No free healthcare. Chinese "health insurance" doesn't cover medicines (They don't have "prescription medicine" the way we do). Extremely expensive housing. $15,000 just to register a car. A typical apartment doesn't have an actual kitchen. In fact most of the apartments I stayed at in Shanghai had a single plugin style cook top. And I had to share the apartment with 4 to 5 strangers because the company is too cheap to pay for a privacy.

Not talking about cost of living, just total tax burden. Yes, I know that Shanghai is one of the most expensive real estate markets in the world. If you live in Mass and have a solid income level, the total tax burden sucks as much or worse than in a commie / socialist location unless you’re rich enough to live off of investment interest.

By "socialist benefits" I assume you mean little/no food on the shelves, limited consumer merchandise that's at best 3rd world quality, minimal and rationed health care, tiny substandard assigned housing, etc., etc., etc. .

I have no interest in living in a commie country and I didn’t say the benefits were great. My point is that at a certain income level, the tax burden here really, really sucks as if we were in a commie country. Trump has given the middle a break and quietly F-ed the upper middle/ lower upper (in states such as Mass), and left the upper+ alone.

 

[ProGun]

We'll be over 31% or so for state and Federal income tax. Far too much. Looks about same as last year.

 

[rep308]

Please do the math, own/not owe is a dumb and useless metric.

How much did you PAY in TOTAL FED TAX this year vs last based on a similar income.

I paid 15% LESS total tax this year than last. I don't get refunds because I carefully adjust my withholdings and quarterly payments.

 

[babygorilla]

Got screwed, same as last year. I got more in every check, but paid the same at the end of the year.

 

[TLB]

Not talking about cost of living, just total tax burden. Yes, I know that Shanghai is one of the most expensive real estate markets in the world. If you live in Mass and have a solid income level, the total tax burden sucks as much or worse than in a commie / socialist location unless you’re rich enough to live off of investment interest.



I have no interest in living in a commie country and I didn’t say the benefits were great. My point is that at a certain income level, the tax burden here really, really sucks as if we were in a commie country. Trump has given the middle a break and quietly F-ed the upper middle/ lower upper (in states such as Mass), and left the upper+ alone.

Complain to your state and local politicians. Vote against prop 2.5 overrides, etc. I'll take a little personal pain to hurt the high tax states like they deserve.

 

[Shire Guy]

Self employed, sole proprietor, typical annual business write-offs ... lowest effective federal tax rate in 25 years.

 

[ProGun]

Think I need a new accountant...

 

[Hardwired]

Self employed, sole proprietor, typical annual business write-offs ... lowest effective federal tax rate in 25 years.

Ther you have it, corporations got a 14% chop, sole proprietors got 20% income free of taxation. White collar working plebes got 2% trim and the SALT and deduction limit f*****ng.

"The new law reduces the income tax rate on regular corporations (sometimes referred to as C corporations) from a top rate of 35% to a flat 21%. Personal service corporations also get the 21% rate. "

"With the C Corp tax rate falling to 21%, Congress did not want other small business owners left out. Unfortunately, they couldn’t just lower their taxes because pass-through income is taxed on the owners’ individual returns.

Instead, Congress gave a 20% deduction for qualified business income, called QBI. This amount will reduce the net income of your business that is subject to taxation. To qualify, your taxable income must be under $157,550 for an individual or $315,000 for married taxpayers who file jointly."

 

[smokey-seven]

Think I need a new accountant...

THERE YOU GO!

I squeak on withholding, always try for the minimum return/owe. I got 15% of my withheld back this year.

 

[Jay77]

Owed a dollar between ma and the feds. First time on the negative side.

 

[rep308]

https://lifehacker.com/you-probably-got-a-tax-cut-even-if-it-doesnt-feel-like-1834046892

This explains the tax situation

 

[Boris]

Ther you have it, corporations got a 14% chop, sole proprietors got 20% income free of taxation. White collar working plebes got 2% trim and the SALT and deduction limit f*****ng.

"The new law reduces the income tax rate on regular corporations (sometimes referred to as C corporations) from a top rate of 35% to a flat 21%. Personal service corporations also get the 21% rate. "

"With the C Corp tax rate falling to 21%, Congress did not want other small business owners left out. Unfortunately, they couldn’t just lower their taxes because pass-through income is taxed on the owners’ individual returns.

Instead, Congress gave a 20% deduction for qualified business income, called QBI. This amount will reduce the net income of your business that is subject to taxation. To qualify, your taxable income must be under $157,550 for an individual or $315,000 for married taxpayers who file jointly."

there are some really good write ups on SALT. Basically, some entities got break and to balance it, a whole bunch of middle classers got SALTed. This mainly effects people in high real estate tax areas like CA, NY and yes, MA.

So basically, it's a nice transfer from some people to other people, but taxes ain't lower. They are lower for special people. Most plebes got out of it are scraps.

Trump touted it as lowering taxes for business. Well, nothing got lowered, it's just making a bunch of some people pay a bunch to other people.

 

[appraiser]

A friend of mine ( an ex actually) has worked for a tax prep service for decades, she is an Enrolled Agent, her year to date customer count and fees charged has dropped in a HUGE way as the people who itemized in the past are now taking the standard deduction. Plus tax prep fees are no longer deductible.

The SALT impact to me is huge, we hit that wall pretty hard as I said above.
Our new plan is to be out of our NH house in 2.5 years max, sell our small home in Florida, and keep the big one in Florida.

That will get us back under the SALT cap.

 

[jhblaze1]

I got a refund, but I did get boned pretty hard.

Trump got rid of the tax deductibility for work related moving expenses. I moved from Boston to LA and my company paid for it. 43K in expenses added to my W2 that were NOT tax deductible. Luckily my company grossed it up to provide tax relief but it wasn't dollar for dollar relief. Kind of tough to figure out the math exactly, but I definitely lost money.

Now you can only deduct work related moving expenses if you're a member of the armed forces moving for that purpose.

This tax plan did jack shit for the middle class. Overall and for most people, it amounts to tinly little baby step in the right direction.

 

[Boris]

I got a refund, but I did get boned pretty hard.

Trump got rid of the tax deductibility for work related moving expenses. I moved from Boston to LA and my company paid for it. 43K in expenses added to my W2 that were NOT tax deductible. Luckily my company grossed it up to provide tax relief but it wasn't dollar for dollar relief. Kind of tough to figure out the math exactly, but I definitely lost money.

Now you can only deduct work related moving expenses if you're a member of the armed forces moving for that purpose.

This tax plan did jack shit for the middle class. Overall and for most people, it amounts to tinly little baby step in the right direction.

the step in the right direction would be tax reduction, that means reducing federal goverment. Who are we kidding, none of these a**h***s is ever going to voluntarily do that.

we are just playing this stupid game of pulling blanket. We need to yank that blanket and burn it. Unfortunately, that's like building 100 border walls challenge, ain't no one got time fo dat!