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  • #31
    Looking like professionals wont see anything but increased pain with this. I dont know that the amt/salt thing does much but wash for me, but the health care adjustments are rather painful. Takes away a lot of the benefit to being self employed, at least retirement stuff hasnt been altered yet.

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    • #32
      Someone correct me and please tell me I am wrong.
      With this new proposal, I won't be able to deduct mortgage interest on my rentals? For me, this amounts to 5 figures of tax savings every year, and the ability to pay virtually $0 tax on my real estate side business. No way I see Trump the real estate mogul dreaming up something this asinine.

      Comment


      • #33




        Someone correct me and please tell me I am wrong.
        With this new proposal, I won’t be able to deduct mortgage interest on my rentals? For me, this amounts to 5 figures of tax savings every year, and the ability to pay virtually $0 tax on my real estate side business. No way I see Trump the real estate mogul dreaming up something this asinine.
        Click to expand...


        I know there were exceptions carved out for real estate businesses in other things, but I dont know which for sure. We'll see, Im also concerned about this.

        Comment


        • #34
          Does 10k property tax deduction cap also apply aggregate to rental properties? No, I hope?

          Comment


          • #35







            I wonder if they will fix the marriage tax penalty for dual income households.
            Click to expand…


            They’re not, despite the promise otherwise.

            35% starts at $200k for individuals, and $260k for married.  It should be $400k.

            On the other hand, the 12%, 25% and 39.6% brackets are doubled.

            It’s sort of like a slam on the upper-middle class, and a handout for those over $500k.

            I wrote to my rep and senators to complain, for whatever that’s worth.
            Click to expand...


            This is exactly how I'm looking at this - a slam on the upper middle class. I really hate this plan.

            Comment


            • #36










              I wonder if they will fix the marriage tax penalty for dual income households.
              Click to expand…


              They’re not, despite the promise otherwise.

              35% starts at $200k for individuals, and $260k for married.  It should be $400k.

              On the other hand, the 12%, 25% and 39.6% brackets are doubled.

              It’s sort of like a slam on the upper-middle class, and a handout for those over $500k.

              I wrote to my rep and senators to complain, for whatever that’s worth.
              Click to expand…


              This is exactly how I’m looking at this – a slam on the upper middle class. I really hate this plan.
              Click to expand...


              makes sense though. theres enough of us and were paid enough to basically fund these cuts with the least amount of pain to those media, etc...care about, while still being able to pass it up to those they care about, the ultra wealthy. Pretty clever really.

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              • #37
                Zaphod you’re right. It’s very clever and will probably work. The big question is what the long term consequences will be. Both political and economic. What will we, the upper middle class, do in response to these changes? Will people migrate out of HCOL areas and thus change the make up of the voting population in LCOL states? Will we all find ways to simply dodge these taxes through loopholes? Will the housing market suffer enough to cause another market downturn? These are big unknowns in my mind. More importantly we have 3 more years of an idiot president doing things like trying to sell fossil fuels instead of helping the rest of the world solve a climate change crisis (one that I believe is easily fixable if we all work together). Interesting times, a little scary too.

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                • #38
                  The per capita demand for electricity has been increasing every year. Electricity is generated from an electromagnet powered by steam, which is generated from coal, natural gas, and oil. So until you invent another scalable and reasonably priced option, fossil fuels are here to stay. Or don't use your house lights.

                  Comment


                  • #39
                    Saw a nice article detailing the house plan today form USA Today: https://www.usatoday.com/story/money/personalfinance/2017/11/02/tax-plan-republicans-outlines-sweeping-changes-individuals/825232001/

                    I'm surprised more of you aren't excited about the AMT going away. That's huge for high income professionals. In fact, the only bad thing I saw there for high income pros was the loss of the state income tax deduction.
                    The GOP plan envisions reducing the current seven tax brackets for individuals to the following: 12%, 25%, 35% and 39.6%.

                    That 39.6% bracket would kick in above $1 million in income for married couples, or $500,000 for others.

                    That's huge for highly paid docs and two doc couples. Instead of kicking in at $418K ($471K married), now it kicks in at $500K/$1M. That also helps the marriage tax penalty.

                    A core element of the GOP plan would be a major downsizing of the many deductions that have cluttered up the nation's tax code over the years. Many individual write-offs would disappear, though the charitable-donation deduction would be retained and homeowners would keep at least some of their key breaks.


                    Deductions that would be eliminated include those for state and local income taxes, casualty losses and medical expenses (though current low allows medical write-offs only above 10 percent of income, with a lower threshold for seniors). Also, the plan would scrap the personal exemption.


                    Also repealed: deductions for alimony payments and moving costs. In addition, the bill would scale down some higher-education benefits, including the interest deduction on student loans and a deduction for tuition expenses.


                    To compensate, the House Republican proposal would roughly double the standard deduction, which would benefit about 70 percent of Americans who utilize this tax break rather than itemizing deductions separately. The new standard deduction would jump to $12,000 from $6,350 for single taxpayers, with a rise to $24,000 from $12,700 for married couples filing jointly. It would be indexed for inflation, meaning the 2018 amount for married couples, for example, actuallly would be set at $24,400.



                    Yea, sucks to lose the state tax deduction, but no one can argue the boost in standard deduction and reduction of various deductions isn't good policy.

                    The two key housing write-offs — those affecting mortgage interest and property taxes — would change for some people. Existing homeowners still would be able to deduct their mortgage interest, as is currently the case. But buyers of homes in the future would be limited to deducting interest on up to $500,000 in debt. That's down from a current cap of $1 million, Luscombe noted.


                    The mortgage-interest changes would apply to housing loans incurred after Nov. 2. This deduction would be limited to primary residences only (compared with one primary residence and one other home, under current law). So someone buying a property for $550,000 and making a $50,000 downpayment could still write off interest in full on the remaining $500,000 debt.


                    The property-tax deduction is another key item, especially in states like New Jersey and Illinois, where rates are high, and those like California where seven-figure home values are common. Under the proposal, homeowners would be able to deduct up to $10,000 a year in state and local property taxes.


                    The proposal also would curtail Americans’ ability to avoid taxes on housing capital gains.


                    Currently, people can skirt taxes on up to $250,000 of gains (singles) or $500,000 of  gains (married couples) if they both own and use a residence for at least two of the prior five years. The new plan would require homeowners to own and use a personal residence for five of the previous eight years. Also, this break would phase out for singles earning above $250,000 and couples making in excess of $500,000.



                    Good. Maybe more docs will pay off their mortgage and buy cheaper houses. Glad I live in a low property tax state as mine will still be deductible. This one could burn a lot of docs though I suppose. I think it's good policy not to subsidize spending a ton on housing.

                    Unlike deductions, which reduce the amount of income on which taxes are owed, credits are direct reductions in taxes themselves. The House GOP plan establishes a new family credit, which includes expanding the child tax credit, to $1,600 from $1,000. It also would provide a credit of $300 for each parent and non-child dependent.


                    The proposal also would preserve the existing credit for child and dependent care. This tax break assists families in the care of children and older dependents such as disabled grandparents. It also retains the Earned Income Tax Credit, a popular break for low-income individuals.



                    Don't know if this eliminates the phase out or not. I don't currently get these credits. Would be pretty sweet to ditch the phaseout.

                    While the tax-reform plan retains that top 39.6-percent bracket, it still offers some big potential breaks for the rich. Most  significant is the eventual repeal of the estate or death tax — a tax that applies to well under 1 percent of Americans — after six years. It also would immediately double the estate-tax exemption or exclusion amount, which is currently slightly above $5 million.


                    Tim Steffen, director of advanced planning for Baird Private Wealth Management, doesn’t expect this tax will be repealed ultimately. “Estate taxes are viewed as a tax only on the rich, and that's not exactly a sympathetic group,” he said.


                    Also, the bill would repeal the Alternative Minimum Tax, a parallel tax system designed to ensure that nobody can use so many exemptions, deductions, credits and the like to avoid paying taxes.



                    The estate tax will probably change 10 more times between now and when I die. I was okay with where it was before. I've never paid AMT, but I hear lots of docs complaining about it, so that should be pretty welcome.
                    Helping those who wear the white coat get a fair shake on Wall Street since 2011

                    Comment


                    • #40




                      A core element of the GOP plan would be a major downsizing of the many deductions that have cluttered up the nation’s tax code over the years. Many individual write-offs would disappear, though the charitable-donation deduction would be retained and homeowners would keep at least some of their key breaks.


                      Deductions that would be eliminated include those for state and local income taxes, casualty losses and medical expenses (though current low allows medical write-offs only above 10 percent of income, with a lower threshold for seniors). Also, the plan would scrap the personal exemption.


                      Also repealed: deductions for alimony payments and moving costs. In addition, the bill would scale down some higher-education benefits, including the interest deduction on student loans and a deduction for tuition expenses.


                      To compensate, the House Republican proposal would roughly double the standard deduction, which would benefit about 70 percent of Americans who utilize this tax break rather than itemizing deductions separately. The new standard deduction would jump to $12,000 from $6,350 for single taxpayers, with a rise to $24,000 from $12,700 for married couples filing jointly. It would be indexed for inflation, meaning the 2018 amount for married couples, for example, actuallly would be set at $24,400.



                      Yea, sucks to lose the state tax deduction, but no one can argue the boost in standard deduction and reduction of various deductions isn’t good policy.

                       
                      Click to expand...


                      Well, I can argue that boosting the standard deduction isn't good, because I have more than one kid. Remember, the personal exemptions get axed. So with three kids, I lose 5 x ~$4k = $20k in personal exemptions that are dropped. In return, I still itemize...so my taxable income goes up by at least $20k in this plan. The penalty (relative to current law) is bigger the more kids you have.

                      Now I suppose we could debate as to whether people with more kids should get a bit more of a tax break...but relative to current law, the standard deduction and personal exemption changes hurt anyone with more than one kid.

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                      • #41
                        amt will balance for most with SALT taxes. a wash. I think its much better for people bumped up into it due solely to inflation.

                        Im interested to see what the housing stuff does to the economy at large. Could be more affordable long term, etc...but housing is a large part of the economy. Not that its a good reason or something great to promote, might just be painful in short term.

                        Comment


                        • #42
                          Thanks for your comments.

                          Phew. Looking like investment properties are safe, those limits are on primary residence.

                          I do see this as a better deal for married and with children, and punishment for being single. Even moreso than before. This is intellectually dishonest and doesn't make sense.

                          How about rewarding those who contribute to the economy or create objective and subjective value? Getting married or having children requires zero creativity or intelligence. It arguably places a large strain on the economy and the environment (well it does).

                          Output and value should be rewarded. We aren't China, just making warm bodies doesn't make you more powerful in and of itself. I know I will get a lot of flack for this because most physicians on here are married, but last time I checked we all see the same patients and do the same work. Why should I be taxed more?

                          Comment


                          • #43







                            A core element of the GOP plan would be a major downsizing of the many deductions that have cluttered up the nation’s tax code over the years. Many individual write-offs would disappear, though the charitable-donation deduction would be retained and homeowners would keep at least some of their key breaks.


                            Deductions that would be eliminated include those for state and local income taxes, casualty losses and medical expenses (though current low allows medical write-offs only above 10 percent of income, with a lower threshold for seniors). Also, the plan would scrap the personal exemption.


                            Also repealed: deductions for alimony payments and moving costs. In addition, the bill would scale down some higher-education benefits, including the interest deduction on student loans and a deduction for tuition expenses.


                            To compensate, the House Republican proposal would roughly double the standard deduction, which would benefit about 70 percent of Americans who utilize this tax break rather than itemizing deductions separately. The new standard deduction would jump to $12,000 from $6,350 for single taxpayers, with a rise to $24,000 from $12,700 for married couples filing jointly. It would be indexed for inflation, meaning the 2018 amount for married couples, for example, actuallly would be set at $24,400.



                            Yea, sucks to lose the state tax deduction, but no one can argue the boost in standard deduction and reduction of various deductions isn’t good policy.

                             
                            Click to expand…


                            Well, I can argue that boosting the standard deduction isn’t good, because I have more than one kid. Remember, the personal exemptions get axed. So with three kids, I lose 5 x ~$4k = $20k in personal exemptions that are dropped. In return, I still itemize…so my taxable income goes up by at least $20k in this plan. The penalty (relative to current law) is bigger the more kids you have.

                            Now I suppose we could debate as to whether people with more kids should get a bit more of a tax break…but relative to current law, the standard deduction and personal exemption changes hurt anyone with more than one kid.
                            Click to expand...


                            I think it'd be very easy to argue kids should be incentivized. Demographics is destiny and all that. Taxes are all about incentives. Incentives now are to be born extremely wealthy, high up in a larger fortune 100 company, have money in foreign countries, etc...

                            I didnt understand the foreign tax one time thing and it becomes free after that? How does that work?

                            Comment


                            • #44







                              A core element of the GOP plan would be a major downsizing of the many deductions that have cluttered up the nation’s tax code over the years. Many individual write-offs would disappear, though the charitable-donation deduction would be retained and homeowners would keep at least some of their key breaks.


                              Deductions that would be eliminated include those for state and local income taxes, casualty losses and medical expenses (though current low allows medical write-offs only above 10 percent of income, with a lower threshold for seniors). Also, the plan would scrap the personal exemption.


                              Also repealed: deductions for alimony payments and moving costs. In addition, the bill would scale down some higher-education benefits, including the interest deduction on student loans and a deduction for tuition expenses.


                              To compensate, the House Republican proposal would roughly double the standard deduction, which would benefit about 70 percent of Americans who utilize this tax break rather than itemizing deductions separately. The new standard deduction would jump to $12,000 from $6,350 for single taxpayers, with a rise to $24,000 from $12,700 for married couples filing jointly. It would be indexed for inflation, meaning the 2018 amount for married couples, for example, actuallly would be set at $24,400.



                              Yea, sucks to lose the state tax deduction, but no one can argue the boost in standard deduction and reduction of various deductions isn’t good policy.

                               
                              Click to expand…


                              Well, I can argue that boosting the standard deduction isn’t good, because I have more than one kid. Remember, the personal exemptions get axed. So with three kids, I lose 5 x ~$4k = $20k in personal exemptions that are dropped. In return, I still itemize…so my taxable income goes up by at least $20k in this plan. The penalty (relative to current law) is bigger the more kids you have.

                              Now I suppose we could debate as to whether people with more kids should get a bit more of a tax break…but relative to current law, the standard deduction and personal exemption changes hurt anyone with more than one kid.
                              Click to expand...


                              I'm not seeing the personal exemption thing. Got a reference? Those start phasing out at $261K single anyway, so lots of docs aren't getting them anymore.
                              Helping those who wear the white coat get a fair shake on Wall Street since 2011

                              Comment


                              • #45




                                Thanks for your comments.

                                Phew. Looking like investment properties are safe, those limits are on primary residence.

                                I do see this as a better deal for married and with children, and punishment for being single. Even moreso than before. This is intellectually dishonest and doesn’t make sense.

                                How about rewarding those who contribute to the economy or create objective and subjective value? Getting married or having children requires zero creativity or intelligence. It arguably places a large strain on the economy and the environment (well it does).

                                Output and value should be rewarded. We aren’t China, just making warm bodies doesn’t make you more powerful in and of itself. I know I will get a lot of flack for this because most physicians on here are married, but last time I checked we all see the same patients and do the same work. Why should I be taxed more?
                                Click to expand...


                                Not giving you flack, but I think your logic is a little off.  Actually the tax code penalizes you for being married if you think about it correctly.  If the tax bracket for a single person has a 200k cut off for the 25% rate, wouldn't you expect that a married couple should have a 400k cut off for the 25% rate?  There are two people working, therefore the potential for twice as much income.  If they were both single making the same amount they'd be taxed at the lower rate.  Instead, the married couple filing jointly gets the 35% bracket at 260k, meaning combined they pay a larger percentage of taxes than they would if they were both single.  So, being married actually hurts you when filing for taxes in many instances.  From a tax perspective, it would be better for a couple making 200k each, to not be married and instead file separate taxes.

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