Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 12-03-2017, 12:28 PM   #121
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 RunningBum View Post
Well, I guess you could just make sure you sell from the brokerage that has the oldest shares. They will report the correct basis for that sale, and the shares you continue to hold will still have the correct basis.
Seems like a ridiculous limitation, but it is workable, without confusion, if you sell from the correct broker.
The IRS rule makers will have something to do.

Stuff like this is where they usually come out with specific IRS general notices.
JoeWras 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 12-03-2017, 12:32 PM   #122
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Quote:
Originally Posted by USGrant1962 View Post
You are missing the new "non-child dependent" tax credit. $500 in the Senate version, which is worth more than the tax on $1,450 in all but the highest brackets, and that is for just one dependent. It is not clear to me if this applies to taxpayer and spouse too, the $300 version in the House bill does. If the Senate rule is the same, it would be a $1500 tax credit in your scenario.
Yes, thanks! I certainly don't pay half of my support and consider myself a dependent spouse, so maybe I qualify for a tax credit now, too.
LOL! is offline  
Old 12-03-2017, 01:13 PM   #123
Moderator
 
Join Date: May 2007
Posts: 12,845
Quote:
Originally Posted by audreyh1 View Post
Yes it will because it will affect the size of your capital gain. When you sell shares to rebalance in your taxable accounts, do you pick specific lots to sell to lower the realized capital gains? Or do you sell the oldest shares first by default?
I currently use SpecID for most investments.

Instead of focusing on Roth conversions like many here (as I don't have much in traditional IRAs), I have been diligently harvesting LTCGs in my taxable account over the past few years (at 0% whenever possible) and my cost basis is relatively high. So I can do quite a bit of rebalancing before hitting the top of the 0% bracket, even with FIFO. And as I wrote previously, I can also rebalance within my Roth IRA which is currently invested 100% in equities. So the FIFO rule would have an impact in theory, but I don't expect it to be a major hindrance for us in practice.

The ACA subsidy cliff is placing a stricter limitation on my ability to rebalance than the new tax bill would actually, as the FIFO rule might make it a bit harder to harvest gains while staying below the cutoff.
FIREd is offline  
Old 12-03-2017, 01:32 PM   #124
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,327
Quote:
Originally Posted by Lsbcal View Post
Next year is RMD time for us. That means about 30% marginal rate for us under current tax law. But under the new tax law proposals, our marginal rate would be around 12%. BTW, I don't think our overall tax bill will be much different so nothing to envy here.

So how to handle charitable donations? For cash donations I'll wait until later in the month. For donations of items (sitting in our garage now), I have to make a decision pretty soon as some of this has to be picked up by a truck.

I think some blended version of this tax law will pass and the marginal rates will be a lot lower then now. So my guess: donate in 2017 assuming you fall in the lower rate areas. Tax rates I've seen (link at: Here's what's in the Senate tax bill - Dec. 2, 2017 ) are:

Anybody agree or disagree with this? Opinions welcome.
If you are at a time when RMDs are a requirement, if you have IRAs consider using the donate directly to the charity from the IRA mode. Giving to Charity From an IRA: What's the Best RMD Strategy? | Money
if done properly the money counts towards an RMD but does not show up on the 1040 in any form. So for folks of an age for RMDs this is the way to do charity now.
meierlde is offline  
Old 12-03-2017, 01:39 PM   #125
Recycles dryer sheets
 
Join Date: Nov 2017
Posts: 275
Quote:
Originally Posted by kjpliny View Post
It appears that the final senate bill has removed the Hatch amendment in sec 13611 on page 284 that originally combined the 401k/403b & 457 limits into one aggregate limit, so those who contribute to both should still be able to max both.
Quote:
Originally Posted by 43210 View Post
I don't understand how you came to that conclusion. It wasn't my understanding that the aggregate limit (for 401k/403b & 457) was removed, but that's only due to lack of seeing it in the news (searching internet for that info).
Quote:
Originally Posted by kjpliny View Post
The bill that passed yesterday is here (see page 284):
https://www.wsj.com/public/resources...LL12012017.pdf

The chairman's mark, which is where the aggregate limit across plans first appeared (see page 179) aka "The Hatch Amendment", apparently didn't make it into the bill that passed:

https://www.finance.senate.gov/imo/m...kup%2011-9.pdf

The bill which was after the Chairman's Mark, but before the final passed bill was this one:
https://www.taxreformandtransition.c...t-to-Floor.pdf

You can see in the same section as the final bill that the 457 aggregate limits are no longer there.

Unless someone can show a passed bill which includes the wording in the hatch amendment, I don't see any evidence that the aggregate limits made it into a passed bill.
Okay, I definitely see your point.

As of the "11.14.17 Chairman's Modified Mark" some of the proposed 457b changes were stricken, from the "11.9.17 Chairman's Mark_SENATE", but the 403/457 aggregate limits were not stricken at that time, and I'd found this
http://www.ntsa-net.org/News/Browse-...ns/pfcatid/281
http://www.ntsa-net.org/News/Browse-...use-and-Senate
from a website that seems focused on 457b plans, so I'd expect they'd soon say what the result was. I was expecting to see news on this one way or another, but I guess it's one those things that doesn't affect many people.

But it certainly seems you're right that it's not in the Senate bill (nor House).
43210 is offline  
Old 12-03-2017, 01:44 PM   #126
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 3,147
For us personally, either the proposed House or Senate bills do not have a huge impact. Our AGI is right around $40,000. The higher Standard Deduction comes close to offsetting the loss of Personal Exemption. If whatever passes has a credit for each taxpayer, that would be nice, but so far I'm not counting on anything.

I'm wondering though, why do all the tax proposals eliminate the Personal Exemption? For us it makes little difference but for a family with more than a couple of kids this will really impact their taxes. I've always understood that if the Federal Govt wants to encourage something they make it a tax deduction - borrowing for a home mortgage, having a family, saving for retirement, etc.

Why this current push to eliminate the Personal Exemption in favor of a larger, but fixed, Standard Deduction?

And none of this looks like "simplification" to me.
__________________
Married, both 66. DH retired June, 2010. I have a pleasant little part time job.
Sue J is online now  
Old 12-03-2017, 01:49 PM   #127
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,391
My father passed away this year so I'll be doing the taxes for my mother.

Their annual property tax bill in CA is over $20k. They paid just over $10k back in April and had at least $10-11k due in December and another $10-11k due in April but I advised my mother to pay both now, to take a huge property tax deduction for the last time.

She does have high income to offset against.
explanade is offline  
Old 12-03-2017, 01:52 PM   #128
Thinks s/he gets paid by the post
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 1,828
Quote:
Originally Posted by Sue J View Post
I'm wondering though, why do all the tax proposals eliminate the Personal Exemption? For us it makes little difference but for a family with more than a couple of kids this will really impact their taxes. I've always understood that if the Federal Govt wants to encourage something they make it a tax deduction - borrowing for a home mortgage, having a family, saving for retirement, etc.

Why this current push to eliminate the Personal Exemption in favor of a larger, but fixed, Standard Deduction?

And none of this looks like "simplification" to me.
It appears to me that they are replacing the exemptions with dependent tax credits (and expanded child tax credits). These are more valuable for the bottom tax brackets than for the high end because they are flat dollar amounts - you don't get a higher benefit in a higher tax bracket like the exemptions provide.

The major simplification is that a large fraction of people that now itemize will switch to the standard deduction.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged

"All models are wrong, some are useful." - George Box
There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
USGrant1962 is offline  
Old 12-03-2017, 01:52 PM   #129
Recycles dryer sheets
 
Join Date: Nov 2017
Posts: 275
Quote:
Originally Posted by Sue J View Post
For us personally, either the proposed House or Senate bills do not have a huge impact. Our AGI is right around $40,000. The higher Standard Deduction comes close to offsetting the loss of Personal Exemption. If whatever passes has a credit for each taxpayer, that would be nice, but so far I'm not counting on anything.

I'm wondering though, why do all the tax proposals eliminate the Personal Exemption? For us it makes little difference but for a family with more than a couple of kids this will really impact their taxes. I've always understood that if the Federal Govt wants to encourage something they make it a tax deduction - borrowing for a home mortgage, having a family, saving for retirement, etc.

Why this current push to eliminate the Personal Exemption in favor of a larger, but fixed, Standard Deduction?

And none of this looks like "simplification" to me.
Don't forget the increased Child Tax Credit (CTC), so families with kids are generally still a little ahead with regard to changes to the Deduction/Exemption/CTC combination.
43210 is offline  
Old 12-03-2017, 01:53 PM   #130
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,429
Quote:
Originally Posted by meierlde View Post
if done properly the money counts towards an RMD but does not show up on the 1040 in any form
Actually, it does show up on Line 15 of Form 1040, but does not get included in your AGI
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline  
Old 12-03-2017, 02:01 PM   #131
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
I will lose deductibility of mortgage interest and property and sales taxes, but seemingly the increased standard deduction will more than cover it. My income sources (SS, IRA, pension) are all taxed as regular income.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline  
Old 12-03-2017, 02:15 PM   #132
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 192
Quote:
Originally Posted by explanade View Post
My father passed away this year so I'll be doing the taxes for my mother.

Their annual property tax bill in CA is over $20k. They paid just over $10k back in April and had at least $10-11k due in December and another $10-11k due in April but I advised my mother to pay both now, to take a huge property tax deduction for the last time.

She does have high income to offset against.
Do they pay AMT?
catotx is offline  
Old 12-03-2017, 02:22 PM   #133
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 2,488
Quote:
Originally Posted by HFWR View Post
I will lose deductibility of mortgage interest and property and sales taxes, but seemingly the increased standard deduction will more than cover it. My income sources (SS, IRA, pension) are all taxed as regular income.
how does the increased standard deduction cover it. Remember the standard deduction does go up, but you loosed the individual exemption. For MFJ the old standard deduction+2 exemptions is just a bit less than the new standard deduction.
bingybear is offline  
Old 12-03-2017, 02:23 PM   #134
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,429
Quote:
Originally Posted by HFWR View Post
I will lose deductibility of mortgage interest and property and sales taxes, but seemingly the increased standard deduction will more than cover it. My income sources (SS, IRA, pension) are all taxed as regular income.
Don't forget that you are losing your personal exemptions as well, which is a big deal. For MFJ over 65, the current standard deduction plus exemptions is 23.8K, so the effective increase is only $200 for these folks.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline  
Old 12-03-2017, 02:37 PM   #135
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,391
Quote:
Originally Posted by catotx View Post
Do they pay AMT?
I will have to study their tax return. They have Schedule C expenses against their income.
explanade is offline  
Old 12-03-2017, 02:46 PM   #136
Thinks s/he gets paid by the post
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 1,828
Quote:
Originally Posted by HFWR View Post
I will lose deductibility of mortgage interest and property and sales taxes, but seemingly the increased standard deduction will more than cover it. My income sources (SS, IRA, pension) are all taxed as regular income.
Mortgage interest on primary homes remain deductible in both bills, but limited to $500K on new mortgages in the House bill.

Property taxes remain deductible in both bills, but limited to $10K/year.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged

"All models are wrong, some are useful." - George Box
There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
USGrant1962 is offline  
Old 12-03-2017, 03:01 PM   #137
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 2,488
Quote:
Originally Posted by USGrant1962 View Post
Mortgage interest on primary homes remain deductible in both bills, but limited to $500K on new mortgages in the House bill.

Property taxes remain deductible in both bills, but limited to $10K/year.
But now that the standard deduction higher it makes less of your interest and property tax deductible. Thus the reason for effectively combining the standard deduction and exemption from the present system.
bingybear is offline  
Old 12-03-2017, 03:12 PM   #138
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,429
Quote:
Originally Posted by bingybear View Post
But now that the standard deduction higher it makes less of your interest and property tax deductible. Thus the reason for effectively combining the standard deduction and exemption from the present system.
Exactly. The number people should be comparing to the proposed standard deduction is their itemized deductions plus exemptions.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline  
Tax Bills
Old 12-03-2017, 03:25 PM   #139
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
Tax Bills

Apologies, as I had heard the deductions were going away... However, I still think $12k is more than the combined totals of MI, PT, and ST, and the current personal deduction, for me, since I’m just barely above the current standard deduction.

Filing and marital status is single.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline  
Old 12-03-2017, 03:28 PM   #140
Recycles dryer sheets
 
Join Date: Feb 2015
Posts: 51
Does anyone know if the foreign tax credit is eliminated?
aza455 is offline  
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 10:41 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.