NEW TAX BRACKETS ARE OUT

[Craigy]

A little bit underwhelming   :lol:

https://www.wsj.com/articles/what-the-republican-tax-plan-means-for-you-1509629815

http://archive.is/bKaA6

MFJ:

12% up to $90,000

25% up to $260,000

35% up to $1,000,000

39.6% over $1,000,000

Standard deduction $24,400, no personal exemptions.

 

For us it ends up being a bit of a side step for me just on the brackets, maybe a savings of four or five grand.  But once you eliminate state tax deduction, it might be a bit of a net tax increase.  Upping standard deduction to $24,400 throws a bit of a wrench into that calculation, may put us just taking the standard deduction until our charitable gifts increase in the future.

[The White Coat Investor]

You mean someone made a proposal about some potential future tax brackets. Not quite the same thing.

I'll save a little money on the brackets there since a lot more of my income will be at 35% instead of 39.6%. But I could easily give that back by not being able to deduct state income taxes.

[jfoxcpacfp]

Well, proposed tax brackets are out. We'll see...

[VagabondMD]

The White Coat Investor wrote:

You mean someone made a proposal about some potential future tax brackets. Not quite the same thing.

I’ll save a little money on the brackets there since a lot more of my income will be at 35% instead of 39.6%. But I could easily give that back by not being able to deduct state income taxes.

Click to expand...

That is exactly where I am and expect to be a net loser, as proposed.

[Donnie]

Time for a "proposed tax changes" containment thread.

[jfoxcpacfp]

It reduces the tax rate on "hard-earned business income" to no more than 25%. Not working hard enough? SOL.

[Craigy]

The more I look, the more I'm disappointed.  I hate to say it, but if these brackets are the best the GOP has to offer, it's pretty [bad].   Again I'd probably end up paying about the same, maybe a little more or less, but it's hardly a cut or giving us any promised savings.

I could probably be happy with it if they weren't keeping the marriage penalty.  That MFJ 35% bracket should kick in at $400k if the single bracket kicks in at $200k.

Obviously these are just proposed, but I have a feeling they're not going to get any better.  We'll see where this goes.  If nothing happens by year end, chances are, nothing is going to happen at all.

Moderated by WCI

[Lithium]

Not sure if I come out ahead or not.  It's a big deal to me that the AMT is getting repealed, but I'm looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I'm going to appreciate the huge standard deduction.

[jfoxcpacfp]

Lithium wrote:

I’m a sizable winner if the AMT gets ixnayed as planned.  I can’t deduct state taxes now anyway, and my income is barely above the proposed 25% line (I’d love to get it below).

Click to expand...

I think a lot of ppl are overlooking this. The SALT taxes are included in the AMT calculation and losing them for HIPs won't necessarily make as big an impact  for some as might be assumed.

[Craigy]

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand...

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.   :P  Or just move to Texas of Florida.   8-)

[StarTrekDoc]

AMT is the ultimate flat tax system that we have.  It's ironic where they are doing away with AMT, but adjusting the tax code to be more AMT like.

[Zaphod]

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand...

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

[Lithium]

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand...

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand...

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand...

Every year we all have to compute two separate taxes - "regular" and AMT.  We also have 7 brackets currently, and they're proposing cutting it to 4.

[Zaphod]

Lithium wrote:

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand…

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand…

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand…

Every year we all have to compute two separate taxes – “regular” and AMT.  We also have 7 brackets currently, and they’re proposing cutting it to 4.

Click to expand...

That requires no extra work, doesnt matter if there are 50 brackets. You enter the info, it spits out a number. What complicates the code are all the loopholes, etc...not the basics.

[Craigy]

Zaphod wrote:

Craigy wrote:

Lithium wrote:

Not sure if I come out ahead or not.  It’s a big deal to me that the AMT is getting repealed, but I’m looking at ~$75,000 in the 35% bracket, which is an extra $1500 in the end.  I paid more in AMT last year.  There are a ton of more factors to consider, but I like the move toward simplicity at least.  Once I get the house paid off I’m going to appreciate the huge standard deduction.

Click to expand…

I know a lot of people will be happy to see AMT go away.

And good point about simplicity.

A big standard deduction will definitely help encourage me to payoff the house.  And of course lobby my state legislature to cut our horrendous state taxes.     Or just move to Texas of Florida.   

Click to expand…

How does it simplify anything? The AMT/SALT I agree is mostly a wash. However, the new pass through stuff is apparently riddled with rules.

Click to expand...

It makes my personal tax situation simpler.

Like lithium said, fewer brackets.

But mostly, with the big standard deduction, and limiting itemized deductions, it discourages me from itemizing, which is the most complicated part of my return.

There's nothing simple about taxes.  Nothing simple about subchapter K.  Nothing simple about corporate tax.