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Old 02-12-2019, 10:09 AM   #121
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My effective tax rate for 2018 is a half of a percentage point lower than 2017 despite an increase in AGI. I'm in a high tax State and hit the $10k SALT cap and was also moved over to a standard deduction for the first time in 8 years.


I also plugged my 2018 information into TT '17 to compare how my 2018 docs faired under both the old and new tax law. Just like my effective tax rate example above I make out better under the new law.


I consider myself middle class but of course that is debatable.
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Old 02-12-2019, 10:18 AM   #122
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Quote:
Originally Posted by gerntz View Post
It wasn't particularly abrupt. It was passed in 2017 to go into effect for 2018. People had 2018 to change their behavior. That's not a short time.
LOL! Sure, they could have moved to a different state.

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Again, STATES aren't affected. PEOPLE are affected.
People in specific states.

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People favored were lower income folks in general.
Nonsense. Corporations and the rich were favored.
People living in states with high state and local taxes were targeted.

Sorry about the truth.
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Old 02-12-2019, 10:19 AM   #123
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How is people being required to pay more similar Fed income tax for the same AGI punishing anyone?

If anyone is being punished, it's those that choose to pay high state & local taxes. Why do that if you don't like it? Why should those that don't make that choice subsidize those that do? Ridiculous to me.
Tell me again which states you think are most subsidized by the federal government?
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Old 02-12-2019, 12:15 PM   #124
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Originally Posted by samclem View Post
A note: The discussion of individual or collective impact of the 2018 tax law may yield some interesting insights.
The discussion of this or that federal spending priority is not directly related to this topic.
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Once again, this is a thread about individual tax rates and how our taxes changed year-to-year.
Plenty of opportunity to discuss deficits, debts and other stuff in another thread.
**** 3rd/final mod warning***
The mod team would like to keep this thread open for members to discuss personal impacts, but debate on the rationale of the tax laws themselves is scope creep that will result in thread closure.
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Old 02-12-2019, 03:40 PM   #125
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For those that want to get a quick, accurate idea of the actual impact on them from the new tax laws, I have found this site to be pretty easy to use and accurate:

https://www.mortgagecalculator.org/c...calculator.php

If you enter your info into the 2018 version, it will also carry over to the 2017 version, but you do have to manually turn on the exemptions for 2017.

FWIW, it calculates my 2018 taxes to within a few bucks of my Turbotax output.
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Old 02-12-2019, 04:03 PM   #126
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I saved about $2K in taxes in 2018 taking the new standard deduction compared to using the 2017 tax table and itemizing plus personal exemption. Mostly because my highest tax bracket went from 28% to 24%.

This is the first year since 1991 (I bought a house that year) that I have not itemized. As a single person with only a $6300 standard deduction, it was always better to itemize, even after I paid off the mortgage. Itemizing saved me a lot of money over the years and was a big motivation for buying a house. My sympathies for those of you who live in high SALT states.
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Old 02-12-2019, 04:08 PM   #127
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Originally Posted by CardsFan View Post
For those that want to get a quick, accurate idea of the actual impact on them from the new tax laws, I have found this site to be pretty easy to use and accurate:

https://www.mortgagecalculator.org/c...calculator.php

If you enter your info into the 2018 version, it will also carry over to the 2017 version, but you do have to manually turn on the exemptions for 2017.

FWIW, it calculates my 2018 taxes to within a few bucks of my Turbotax output.
It ran the numbers okay. But it didn't figure out the marginal bracket at the end correctly. It used total income without taking into account how much of it is the lower taxed QD and LTCG versus ordinary income.
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Old 02-12-2019, 04:31 PM   #128
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It ran the numbers okay. But it didn't figure out the marginal bracket at the end correctly. It used total income without taking into account how much of it is the lower taxed QD and LTCG versus ordinary income.
I don't see any output for marginal brackets. Do you mean EFFECTIVE tax RATE?

If so, you are correct. It uses AGI, which results in a slightly higher Effective Rate. I think Turbotax does the same thing.

EDIT to add: OK, now I see that. Just ignored it before. In my case it was correct: 12% Bracket.
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Old 02-12-2019, 04:37 PM   #129
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In a blue shaded area after the summary but before the tax rate tables, it says this (I Xed out my personal data; emphasis mine):

"Your taxes are estimated at $xxxx. This is xxx% of your total income of $xxxxx. Your total tax payments for the year were $x. Your outstanding tax bill is estimated at $xxxx. This puts you in the 22% tax bracket."
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Old 02-12-2019, 04:38 PM   #130
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In 2017 I hit the trifacta my foreign tax credit equalled my income tax, so big goose egg. 2018 had more ordinary income due to interest rates rising, effective tax rate < 1%. Converted the same amount in Roth, had less LTCG.
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Old 02-12-2019, 04:51 PM   #131
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Originally Posted by scrabbler1 View Post
In a blue shaded area after the summary but before the tax rate tables, it says this (I Xed out my personal data; emphasis mine):

"Your taxes are estimated at $xxxx. This is xxx% of your total income of $xxxxx. Your total tax payments for the year were $x. Your outstanding tax bill is estimated at $xxxx. This puts you in the 22% tax bracket."


Got it. See my edit.
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Old 02-12-2019, 05:20 PM   #132
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Our effective tax rate went from 11.8% in 2017 to 9.2%. The numbers would have been nearly identical if not for the change to the child-tax credit, which grew for us from $550 in 2017 to $4000 in 2018. Without that credit, our effective tax rate would have been 12.1% (basically a wash).

I live in CA, but my SALT deductions are quite a bit lower than some of my neighbors, since we bought our home 20 years ago and Prop 13 caps increases to our property taxes. I know a few folks who won’t fare as well.
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Old 02-12-2019, 05:29 PM   #133
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Got it. See my edit.
Yes, my post and your edit crossed.

But I am nowhere near the 22% bracket for ordinary income. I am barely in the 12% bracket. I am also in the 15% bracket for QD and LTCG. Half of my (taxable) income is taxed at 0%, about 1/4 is taxed at 10.5% (mostly 10% with a sliver at the marginal 12%), and the rest at 15% for QD and LTCG. So, whatever my marginal rates are, they ain't 22%!
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Old 02-12-2019, 05:40 PM   #134
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Originally Posted by scrabbler1 View Post
Yes, my post and your edit crossed.

But I am nowhere near the 22% bracket for ordinary income. I am barely in the 12% bracket. I am also in the 15% bracket for QD and LTCG. Half of my (taxable) income is taxed at 0%, about 1/4 is taxed at 10.5% (mostly 10% with a sliver at the marginal 12%), and the rest at 15% for QD and LTCG. So, whatever my marginal rates are, they ain't 22%!
But if I understand, the $$ numbers are more or less correct?

I have seen many calculators that muck up the tax bracket level, so I am not surprised. I think they often just look at the AGI to come up with that number.
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Old 02-12-2019, 06:00 PM   #135
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But if I understand, the $$ numbers are more or less correct?

I have seen many calculators that muck up the tax bracket level, so I am not surprised. I think they often just look at the AGI to come up with that number.
Yes, and I agree. But this calculator asked for the different types of income and correctly calculated my taxes owed using the QD/LTCG worksheet, so it "knew" I had multiple marginal tax brackets.
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Old 02-13-2019, 11:10 AM   #136
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I just finished our Federal tax forms. Amazingly, the total owed/refunded is ZERO! Yes, no refund, no payment.
It's the first time ever and my year included quarterly tax payments, interest, dividends, SS income, IRA pulls, insurance deductions, some consulting income, business expenses, etc.
Do they allow lottery numbers to be all zeros?

I always make sure I "temporarily" owe Uncle Sam money rather than he owing me.
Like many here, I pay estimated quarterly taxes so, I make sure my quarterly totals are no higher than last year unless my taxes/income for the current year are estimated to go lower. Even when I was employed, I made sure that the payroll taxes for both federal/state followed a similar pattern.
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Old 02-13-2019, 11:42 AM   #137
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Even without SALT or mortgage interest limitations, anyone who filed and continues to file Schedule A will have their taxable income increase (no personal exemption). It all depends on whether the additional tax on a higher taxable income is greater than, less than or equal to the tax savings because of lower tax brackets.
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Old 02-15-2019, 08:01 PM   #138
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Didn't deliver for me at all & I'm not surprised. Income was a little higher & taxes around $10,000 higher. Taking the standard deduction as a result of losing a big chunk of the SALT deduction was the difference. I saw this coming & had increased my withholding so I'm doing OK. Next year should be better because I'm retiring soon & most of my income will be from a pension that the state & NYC don't tax.

I don't love that my taxes are high but I'm not complaining either. I've been very lucky & wouldn't want to live anywhere else.
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Old 02-15-2019, 09:18 PM   #139
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The change from the old standard deduction and personal exemption to the standard deduction of $24,000 benefited us by about $320.

Our income in 2018 was just a little higher than 2017 but in 2018 we had access to an HSA and contributed $8900 so our taxable income was quite a bit less.

Still in the 10% tax bracket with a little room to spare!
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Old 02-16-2019, 10:12 AM   #140
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I personally witnessed an ugly effect of the new law. Like many others, I'm a volunteer who prepares taxes at the library. I had a 90 year lady who itemized for the 2017 tax year about $11.5K for property taxes, mortgage interest (yes, she still has a mortgage, actually 2), charitable contributions, and some medical that exceeds the threshold. She has a similar amount of deductions for 2018. She has a small pension and social security income streams. Her income amounts are practically identical for both years. For 2018 she is only qualified for the standard deduction of $13.6K. For the 2017 tax year, she got the personal exemption and her itemized deductions. Her 2018 Federal tax bill is a little more than $200 over her 2017 amount. Again, this is for a 90 year old with little income...
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