Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 12-02-2017, 03:26 PM   #21
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 3,033
Does anyone know if the preferential tax treatment given to Schedule C filers (ie 17% business income deduction) will also be extended to Schedule E filers who consider themselves a business?

I know that we have multiple landlords on this forum...

-gauss
gauss is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-02-2017, 03:27 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
easysurfer's Avatar
 
Join Date: Jun 2008
Posts: 11,192
Waiting for the dust to settle before making any planning, decisions or further discussions .
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
easysurfer is online now  
Old 12-02-2017, 03:38 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 7,320
Quote:
Originally Posted by gauss View Post
Does anyone know if the preferential tax treatment given to Schedule C filers (ie 17% business income deduction) will also be extended to Schedule E filers who consider themselves a business?

I know that we have multiple landlords on this forum...

-gauss
Unfortunately, the current bill (https://www.budget.senate.gov/imo/me...SUBSTITUTE.pdf) is a scan because of the handwritten notes, so you can't search it. It would be handy for questions like this.

Hopefully some senate page will get a real version uploaded soon.
JoeWras is offline  
Old 12-02-2017, 03:48 PM   #24
Recycles dryer sheets
 
Join Date: Nov 2017
Posts: 275
Quote:
Originally Posted by easysurfer View Post
Waiting for the dust to settle before making any planning, decisions or further discussions .
I'm making contingency plans now, because there'll be limited time to act, and it may make big changes in what I do, and I find the analysis fun.

Fortunately I can make changes with payroll throughout the year, but I need to make decisions for January soon. Since all possible tax bills lead to me going either 100% Trad or 100% Roth for 403b/457b, and I don't yet know which it'll be, I think I will use January to lump-max my HSA (which will only be a mistake if I don't stay in the job all year).
43210 is offline  
Old 12-02-2017, 03:50 PM   #25
Recycles dryer sheets
 
Join Date: Nov 2017
Posts: 275
Quote:
Originally Posted by 43210 View Post
I'm watching the changes to retirement plans. I believe the Senate bill combines the 457b limit with the 401k/403b limit so I could now contribute $24.5k=$18.5k+$6k total, instead of $24.5k to 403b and another $24.5k to 457b (total $49k). (These are on top of 401a, IRAs, HSA - I tax defer most of my income).

In response I would totally change how I contribute to Trad, Roth, taxable. I've looked at the numbers, and planned accordingly, so I'm just waiting to see what the final tax law is.

There were other proposed changes to retirement plans, e.g. they were going to impose the 10% early withdrawals penalty on 457b plans, but that was stricken. So (as things stand) 457b plans will still be a penalty-free source of funding for early retirees below age 55.
I forgot another obvious one. No recharacterizations (in both bills), so you'll need to be sure of your Trad/Roth decisions when you make them.
43210 is offline  
Old 12-02-2017, 03:53 PM   #26
Thinks s/he gets paid by the post
gayl's Avatar
 
Join Date: Jun 2004
Location: Diablo Valley (SF Bay Area)
Posts: 2,231
Quote:
Originally Posted by easysurfer View Post
Waiting for the dust to settle before making any planning, decisions or further discussions .
+1
gayl is offline  
Old 12-02-2017, 03:59 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 11,383
Quote:
Originally Posted by 43210 View Post
I forgot another obvious one. No recharacterizations (in both bills), so you'll need to be sure of your Trad/Roth decisions when you make them.
Thanks. That's a big deal to know early in the year, since some of us do a large conversion (and perhaps a horse race between multiple conversions) early in the year, and now we'll need to be more conservative, and either wait or do a final conversion after year end mutual fund distributions.
RunningBum is offline  
Old 12-02-2017, 04:00 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 7,320
It is nearly a "no-brainer" for charity donors to go this year. I don't want to wait. I'm already past the standard deduction for this year, so why not donate and get the benefit?

In future years, I'll likely bunch 3 years together using my DAV to distribute them out over 3 years.
JoeWras is offline  
Old 12-02-2017, 04:15 PM   #29
Dryer sheet wannabe
vtd0918's Avatar
 
Join Date: Oct 2015
Posts: 19
Quote:
Originally Posted by 43210 View Post
I'm watching the changes to retirement plans. I believe the Senate bill combines the 457b limit with the 401k/403b limit so I could now contribute $24.5k=$18.5k+$6k total, instead of $24.5k to 403b and another $24.5k to 457b (total $49k). (These are on top of 401a, IRAs, HSA - I tax defer most of my income).

In response I would totally change how I contribute to Trad, Roth, taxable. I've looked at the numbers, and planned accordingly, so I'm just waiting to see what the final tax law is.

There were other proposed changes to retirement plans, e.g. they were going to impose the 10% early withdrawals penalty on 457b plans, but that was stricken. So (as things stand) 457b plans will still be a penalty-free source of funding for early retirees below age 55.


I am waiting to know this piece as well. I max out my 457b and 401k for a total of $36k ($37k next year) but if it’s combined with this new tax bill that would be a total bummer for me. I guess I would max the 457b and whatever I would’ve contributed to the 401k would go into a taxable but it wouldn’t help with lessening the taxes during my working years. I still have another 20 years or so to go before I retire.
vtd0918 is offline  
Old 12-02-2017, 04:21 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,162
Quote:
Originally Posted by 43210 View Post
I forgot another obvious one. No recharacterizations (in both bills), so you'll need to be sure of your Trad/Roth decisions when you make them.
Any idea when the prohibition on recharacterizations is effective? IOW, does it prohibit 2018 recharacterizations of conversions made in 2017? or just 2019 recharacterizations of conversions made in 2018?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now  
Old 12-02-2017, 04:34 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 11,383
Quote:
Originally Posted by JoeWras View Post
It is nearly a "no-brainer" for charity donors to go this year. I don't want to wait. I'm already past the standard deduction for this year, so why not donate and get the benefit?

In future years, I'll likely bunch 3 years together using my DAV to distribute them out over 3 years.
Right, and I am taking more income this year and less next year anyway, so it should be a 30% deduction this year, and 0% next year. I just hope those charities realize they are getting about 4 years worth at once, and not to count on the larger amount each year! If I can I'm going to note that on my donations.
RunningBum is offline  
Old 12-02-2017, 04:50 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Amethyst's Avatar
 
Join Date: Dec 2008
Posts: 10,454
So far I have not found a calculator that fits our situation.

Primary income from 1099Rs
Some W-2 income
Dividends, CG distro's and interest, including muni bond interest
RMD
Usually pay AMT
High-tax state and county


Quote:
Originally Posted by jetpack View Post
I found this site helpful.
Tax Plan Calculator by Maxim Lott

maybe too simplistic for some.

The Standard Deduction, dropping the ACA requirement and giving a break on pass through llc, will all be big savings for me.
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
It involved a mannequin hand, and an electric shaver taped to a golf club! - "The Other Guys"
Amethyst is offline  
Old 12-02-2017, 04:58 PM   #33
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 192
If the FIFO stock sale requirement makes it into the final bill, tax loss harvesting would not work unless the loss is in the first tax lot, or if the loss is large enough that you can sell through the earliest lots to reach the lots with losses.

Alternatively, this could encourage investors to invest in a different ETF for each asset class, e.g. for US LargeCap: VV, VOO, SCHX, IVV, SCHK, MGC, VONE, IWB, SPLG, SPY. The idea is to switch to a new ETF whenever there is major advancement in the asset class. E.g. if I am investing in VV, after a 10% rise in VV, I would switch to the next ETF VOO when I have new funds for investment. In this way, when there is a fall in US LargeCap, I can sell VOO to tax loss harvest without needing to sell the earlier VV shares.

The TLH features touted by the robo advisors like Wealthfront or Betterment would not work easily anymore.
catotx is offline  
Old 12-02-2017, 04:59 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 12,106
Quote:
Originally Posted by Ian S View Post
At 66 and retired, I have relatively little income and have been relying on selling appreciated assets in an after tax account which is down to about $80K with annual spending of ~$50K. Not yet drawing SS but considering whether or not to do so. The bulk of my net worth apart from the house is in traditional IRAs (~1.1M) and Roth (~$200K) so I'm thinking this may be an opportunity to pull out extra IRA funds (via Roth conversion and/or into after tax account.) It may pay to do this sooner than later if these tax cuts are only temporary. i-orp now includes a calculation based on the House bill so hopefully they'll have one soon for the Senate and then final bills.This will probably be good for stocks at least in the short run so maybe should consider upping the equity asset allocation.
I would think you could withdraw or convert IRA amounts this year equal to the deduction you take without paying any taxes, without waiting for the new tax bill.
Sunset is offline  
Old 12-02-2017, 05:06 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 6,013
Quote:
Originally Posted by jetpack View Post
I found this site helpful.
Tax Plan Calculator by Maxim Lott

maybe too simplistic for some.

The Standard Deduction, dropping the ACA requirement and giving a break on pass through llc, will all be big savings for me.
Way too simplistic. No way to enter Qualified Dividends or LTCG which are taxed at lower rates, sometimes zero.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline  
Old 12-02-2017, 05:09 PM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 11,383
Quote:
Originally Posted by pb4uski View Post
Any idea when the prohibition on recharacterizations is effective? IOW, does it prohibit 2018 recharacterizations of conversions made in 2017? or just 2019 recharacterizations of conversions made in 2018?
I can't find anything that addresses this. I see a couple of earlier articles that think 12/31/2017 might be the deadline, but I don't know if they are just guessing. bold in the following quotes is mine.

https://www.cnbc.com/2017/11/09/last...ax-breaks.html

Quote:
On the other hand, if you've already fouled up a conversion in 2017, you may be running out of time to undo that transaction. The GOP's bill will eliminate these Roth "do-overs."
"You might want to consider that recharacterization," said Levine of BluePrint Wealth Alliance. "Your last shot might be Dec. 31."
https://www.thestreet.com/story/1437...vestments.html

Quote:
Luscombe [Mark Luscombe, a principal analyst with Wolters Kluwer] noted that the most significant proposed change in the retirement area, from his perspective, is the elimination of recharacterizations of Roth contributions and conversions effective after 2017. "This could mean that an individual who thought they had until October 2018 to do a recharacterization might have to do it before year-end 2017," he said.
If I don't hear anything definitive, I'm going to recharacterize this month.
RunningBum is offline  
Old 12-02-2017, 05:22 PM   #37
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
Quote:
Originally Posted by jetpack View Post
I found this site helpful.
Tax Plan Calculator by Maxim Lott

maybe too simplistic for some.

The Standard Deduction, dropping the ACA requirement and giving a break on pass through llc, will all be big savings for me.
When I run it for me, It's a wash. I pay slightly more in the senate version, slightly less in the house version.

If it's simpler, it's better.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline  
Old 12-02-2017, 05:33 PM   #38
Thinks s/he gets paid by the post
Philliefan33's Avatar
 
Join Date: Oct 2014
Posts: 1,347
Quote:
Originally Posted by GrayHare View Post
The Sched A medical deduction that was to have gone away appears to not only be retained, but also available to more people because the qualifying threshhold is dropping from 10% AGI to 7.5%, but just for 2 years.


This is just rolling the law back to where it was in 2016.

For TY 2016, only medical expenses beyond 7.5% AGI were deductible. The threshold went up to 10% for TY 2017.
Philliefan33 is offline  
Old 12-02-2017, 05:48 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 30,524
Quote:
Originally Posted by RunningBum View Post
Right, and I am taking more income this year and less next year anyway, so it should be a 30% deduction this year, and 0% next year. I just hope those charities realize they are getting about 4 years worth at once, and not to count on the larger amount each year! If I can I'm going to note that on my donations.
Set up a DAF and portion it out equally over the four years? Or are you gifting directly from the IRA (which can't go to a DAF)?
__________________
Retired since summer 1999.
audreyh1 is online now  
Old 12-02-2017, 05:48 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 30,524
Quote:
Originally Posted by Philliefan33 View Post
This is just rolling the law back to where it was in 2016.

For TY 2016, only medical expenses beyond 7.5% AGI were deductible. The threshold went up to 10% for TY 2017.
Not quite. The 10% requirement was in place for people under 65 several years ago.
__________________
Retired since summer 1999.
audreyh1 is online now  
Closed Thread

Tags
tax


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Counting large tax bills in SWR outofratrace FIRE and Money 28 06-11-2015 09:21 AM
Pay $15K upfront to pre-pay 20+ years of oil heat bills??? farmerEd Other topics 16 02-14-2008 07:46 AM
Tax issues - helping pay parent's medical bills? audreyh1 FIRE and Money 5 04-14-2006 02:17 PM
What On Earth Is Going On With T Bills? ShokWaveRider FIRE and Money 18 06-03-2005 11:43 AM
CD or Treasury bills and notes? Natalie FIRE and Money 4 07-14-2003 08:46 PM

» Quick Links

 
All times are GMT -6. The time now is 11:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.