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Old 11-12-2017, 07:57 AM   #21
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Overall, this is a great plan for me. I do not make more than $500K, or have a $1M mortgage. I have an average value home.

My tax rate gets lowered.

The standard exemption for me goes up from $6,500 to $12,000+.

I lose my state income tax deduction, but that is more than offset by a lower tax rate and a higher personal exemption.

The property taxes are limited to $10K, I pay less than $2,500 now. I can still buy a second home, deduct them, and be under the $10K limit.

I do not have mortgage interest now, but sometimes I use my HELOC for short term loans. I can still deduct the interest amounts.

The exclusion of the sale of a home except once every five years may hurt, but I have never used it yet, so unlikely to affect me too negatively.

I am not sure about pass-through entities and income based on the article. I may have to restructure some businesses, or dissolve them to take full advantage of the new law. Either way, it appears to be OK. It appears a maximum tax rate of 25%, or maybe I can deduct 17.4% of the income?

I can definitely see how people with expensive houses with a large mortgage and high property taxes may lose some of the deductions.

I am ready for the changes.
The standard deduction is "doubled" but the personal exemptions go away (at least in the House bill, I have not looked at the Senate bill). The net effect is about 15-20% increase in the deduction I think -- not "double."
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Old 11-12-2017, 08:01 AM   #22
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Originally Posted by Senator View Post
Overall, this is a great plan for me. I do not make more than $500K, or have a $1M mortgage. I have an average value home.

My tax rate gets lowered.

The standard exemption for me goes up from $6,500 to $12,000+.

I lose my state income tax deduction, but that is more than offset by a lower tax rate and a higher personal exemption.

The property taxes are limited to $10K, I pay less than $2,500 now. I can still buy a second home, deduct them, and be under the $10K limit.

I do not have mortgage interest now, but sometimes I use my HELOC for short term loans. I can still deduct the interest amounts.

I am ready for the changes.
Senator - you might want to recalculate. You lost your personal exemption, so your standard deduction went from 10,650 to 12,000. Not the doubling you think.

For singles 65 and over its like 11,900 to 12,000. Pretty much the same.
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Old 11-12-2017, 08:31 AM   #23
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For MFJ seniors (both over 65) standard deduction + personal exemption goes from $23,800 in 2018 under the current system to $24,000 standard deduction and no personal exemption under the new.
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Old 11-12-2017, 08:35 AM   #24
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+1 but it seems that many only judge these things based on how it impacts them personally rather than based on common sense or equity and fairness.
I agree with the sentiment that i will take a personal hit if it is overall better for the country or economy.

My issue with this as it is proposed is they initially (as part of the corp taxcut) were also going to greatly reduce the transfer pricing of intellectual capital many corps use to avoid taxes, but when the corps complained they took that out. If i am going to pay more, i want real reform. If corp taxes are to be cut they need to reform the various loopholes such as carried interest, transfer pricing, intangible drilling etc. otherwise it becomes more of a give away.

Same goes for personal tax cuts such as conservation easements, and deductions for appreciated securities at stepped up rather than original basis. None of this was touched

Otoh, what is one persons loophole is another’s livelihood..... but if we are to truely reform, some of these things need to go.
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Old 11-12-2017, 08:42 AM   #25
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Primer on House and Senate versions of proposed tax bill.

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Originally Posted by audreyh1 View Post
Senator - you might want to recalculate. You lost your personal exemption, so your standard deduction went from 10,650 to 12,000. Not the doubling you think.



For singles 65 and over its like 11,900 to 12,000. Pretty much the same.

Also Senator you would claim the new standard deduction, OR write off mortgage interest, real estate taxes and medical expenses, etc, not both.




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Old 11-12-2017, 08:44 AM   #26
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+1 all for a reduction in corporate tax rates even though 35% to 20% seems a bit too generous to me but also need to get rid of those loopholes... even if we phase the loopholes out to keep the peace.
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Old 11-12-2017, 08:50 AM   #27
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+1 but it seems that many only judge these things based on how it impacts them personally rather than based on common sense or equity and fairness.
I think a lot of people are judging this overall on common sense and fairness. It's just that many people do not agree on what is common sense and what is fair!
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Old 11-12-2017, 08:54 AM   #28
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Being from a high COL and property tax area, I suspect that we will end up paying more. I will not miss the AMT however. I would like to see the corporate tax go down as I think that will rev up the economy, and would like to see the estate tax and generation skipping tax eliminated.
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Old 11-12-2017, 08:55 AM   #29
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Originally Posted by audreyh1 View Post
Senator - you might want to recalculate. You lost your personal exemption, so your standard deduction went from 10,650 to 12,000. Not the doubling you think.

For singles 65 and over its like 11,900 to 12,000. Pretty much the same.
It still sounds great.
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Old 11-12-2017, 09:46 AM   #30
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I'm all for fairness, but I can't help but calculate the effect on our own tax situation. Under both plans we no longer itemize, so we essentially reduce AGI by $24,000. Under the House Plan we pay less in each of the next two years (by about $2,000). Under the Senate Plan we save about $1750 in each of the next two years. So the House plan is a bit more advantageous for us, however the 25% tax bracket threshold is lower under the House plan ($260,000) than the Senate plan($290,000). The proposed plans reflect roughly a 10% savings over total federal tax in 2018 and a 5% savings in 2019, the year that the tax bomb hits us. I think under either plan we should be able to stay in the 25% bracket.
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Old 11-12-2017, 09:59 AM   #31
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I agree with the sentiment that i will take a personal hit if it is overall better for the country or economy.

My issue with this as it is proposed is they initially (as part of the corp taxcut) were also going to greatly reduce the transfer pricing of intellectual capital many corps use to avoid taxes, but when the corps complained they took that out. If i am going to pay more, i want real reform. If corp taxes are to be cut they need to reform the various loopholes such as carried interest, transfer pricing, intangible drilling etc. otherwise it becomes more of a give away.

Same goes for personal tax cuts such as conservation easements, and deductions for appreciated securities at stepped up rather than original basis. None of this was touched

Otoh, what is one persons loophole is another’s livelihood..... but if we are to truely reform, some of these things need to go.
+1
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Old 11-12-2017, 10:05 AM   #32
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This may be because we are constrained to keep politics (the overall fairness of a policy is political) out of our discussions, but personal impacts are of interest to each person and are OK to discuss.

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+1 but it seems that many only judge these things based on how it impacts them personally rather than based on common sense or equity and fairness.
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Old 11-12-2017, 10:06 AM   #33
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I agree with the sentiment that i will take a personal hit if it is overall better for the country or economy.
...

"if"
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Old 11-12-2017, 10:13 AM   #34
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I know I'm slow on the uptake but if we're going to pay more + add 1.5T to the federal deficit, why are 'we' doing it?
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Old 11-12-2017, 10:24 AM   #35
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Originally Posted by jebmke View Post
The standard deduction is "doubled" but the personal exemptions go away (at least in the House bill, I have not looked at the Senate bill). The net effect is about 15-20% increase in the deduction I think -- not "double."
Depends on how many kids an MFJ couple might happen to have upon which to to claim personal exemptions ... as I understand.

Seems to me middle income non-itemizers with four or five kids (like my neighbors) might take a hit.
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Old 11-12-2017, 10:43 AM   #36
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All of this might, or might not even come to pass.

In the end, just tell me what I owe and I'll write the check. Can't do anything about it either way and --at least for me--playing what-if doesn't help.
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Old 11-12-2017, 10:48 AM   #37
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I know I'm slow on the uptake but if we're going to pay more + add 1.5T to the federal deficit, why are 'we' doing it?
That's what I don't get. How can such a huge increase in the deficit be good in the long run for any of us? Especially with the economy in fairly good shape. What am I missing?
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Old 11-12-2017, 10:55 AM   #38
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That's what I don't get. How can such a huge increase in the deficit be good in the long run for any of us? Especially with the economy in fairly good shape. What am I missing?
Where does the 1.5T number come from? If it is from the CBO, as I understand it, they are required to do a 'static' model, and there are some 'dynamic' models that include the estimated effect of increased business activity from lowering corporate taxes, and I think, returning funds to the US.

Sorry, I don't have sources for that, and don't have time right now to look them up - I haven't paid too much attention to these proposals, as like others have pointed out, they could change a lot and may not get anything passed. But I think the 'static' versus 'dynamic' modeling may be the key to your question.

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Old 11-12-2017, 11:01 AM   #39
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That's what I don't get. How can such a huge increase in the deficit be good in the long run for any of us? Especially with the economy in fairly good shape. What am I missing?
https://www.vox.com/policy-and-polit...-chris-collins
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Old 11-12-2017, 11:09 AM   #40
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Where does the 1.5T number come from? If it is from the CBO, as I understand it, they are required to do a 'static' model, and there are some 'dynamic' models that include the estimated effect of increased business activity from lowering corporate taxes, and I think, returning funds to the US.

Sorry, I don't have sources for that, and don't have time right now to look them up - I haven't paid too much attention to these proposals, as like others have pointed out, they could change a lot and may not get anything passed. But I think the 'static' versus 'dynamic' modeling may be the key to your question.

-ERD50
I read yesterday it was scored statically, but I don't recall the source. The folks debating static vs dynamic had wildly different opinions of the effects.
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