|
Tax Owed for 2018 vs 2017
12-30-2017, 04:46 PM
|
#1
|
Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,043
|
Tax Owed for 2018 vs 2017
I am still confused, not at the new tax bracket, but what the calculation for actual tax owed would be in 2018.
Example: 25% Married Filing Separate in 2017 MAGI range of $37,950 to $91,900 = TAX OWED of $5,226.25 plus 25% of the excess over $37,950. Example for someone with MAGI = 75,000 TAX OWED would have been: (75k - 37,950)x 0.25 + $5226.25 = $14,488.75
I understand, had there been NO tax bracket change, 38,700-$93,700 would have been the 2018 25% range and this same example has the same rate in 2018.
BUT with the change in brackets none of the articles I read state that you will have a baseline PLUS the 25% of the excess over whatever the bottom of the bracket is.
SO for the sake of the $75k MAGI example, is the 2018 TAX OWED = $75,000 x 0.25 = $18,750 ??
Meaning the tax bill this year would be 4261.25 higher with the new change?
__________________
Time > $$$ ~ 100% equities ~ FIRE @2031
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
12-30-2017, 04:55 PM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,043
|
I understand how one gets to MAGI in 2018 vs 2017 will be different with the elimination of AMT, Estate Tax reduction, personal exemption elimination, standard deduction increases etc. Also, no more moving expenses, misc expenses, tax prep expenses will be allowed. If you have a kid, extra $1000 up to 2 kids etc etc.
__________________
Time > $$$ ~ 100% equities ~ FIRE @2031
|
|
|
12-30-2017, 05:22 PM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
|
One is not taxed on MAGI. One first has to calculate taxable income.
Also tax credits are kinda nice, too.
|
|
|
12-30-2017, 09:32 PM
|
#4
|
Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,043
|
Good pt Lol.
|
|
|
12-30-2017, 10:47 PM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
No... the number you add in your 2017 is just the multiplication of the lower tax brackets times the full amount in that bracket...
So, in 2018, take the first bracket up to the max and multiply by the rate.. now subtract that amount from 75K and you have what needs to be taxed in the next bracket... if that bracket is full, subtract that amount from $75K and then THAT is what is multiplied by 25%....
I do not want to look up the ranges...
|
|
|
12-31-2017, 07:18 AM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,043
|
Quote:
Originally Posted by Texas Proud
No... the number you add in your 2017 is just the multiplication of the lower tax brackets times the full amount in that bracket...
So, in 2018, take the first bracket up to the max and multiply by the rate.. now subtract that amount from 75K and you have what needs to be taxed in the next bracket... if that bracket is full, subtract that amount from $75K and then THAT is what is multiplied by 25%....
I do not want to look up the ranges...
|
Perfect this makes 100% sense to me. I've been staring at turbo tax and running tax scenarios for a week and really started to confuse myself.
|
|
|
12-31-2017, 08:26 AM
|
#7
|
Full time employment: Posting here.
Join Date: Aug 2015
Posts: 550
|
We live in California, where State and Local Taxes are high. In 2018 we are limited to write off on Itemized deduction only up to $10K in State and Local Taxes we pay what is going to reduce our Itemized deductions a lot. It might be close to standard deduction. I know that our Taxes are going up in 2018.
|
|
|
12-31-2017, 09:31 AM
|
#8
|
Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Santa Paula
Posts: 4,077
|
I am almost sure mine will go down.
But I have to change strategy on my donations. I will be giving more donations as QCD's from my IRA. I already have the forms made out. All I have to do is insert the donee and have it notarized. I sent a sample to my fund manager and got it blessed.
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
|
|
|
12-31-2017, 09:31 AM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,153
|
Quote:
Originally Posted by kgtest
I understand how one gets to MAGI in 2018 vs 2017 will be different with the elimination of AMT, Estate Tax reduction, personal exemption elimination, standard deduction increases etc. Also, no more moving expenses, misc expenses, tax prep expenses will be allowed. If you have a kid, extra $1000 up to 2 kids etc etc.
|
AMT was not eliminated - the threshold (exemption) was raised.
__________________
Retired since summer 1999.
|
|
|
12-31-2017, 09:46 AM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
|
Quote:
Originally Posted by Souschef
I am almost sure mine will go down.
But I have to change strategy on my donations. I will be giving more donations as QCD's from my IRA. I already have the forms made out. All I have to do is insert the donee and have it notarized. I sent a sample to my fund manager and got it blessed.
|
That seems like a good deduction. You never get the money, so you should not have to claim it.
My taxes will definitely go down, as much of it is rental income coming in through a K1. I mostly have single member LLCs taxed as a S-Corps. I should see a $2500+ cut in what I am paying.
Most of Americans will see a tax cut. Especially if they have kids. The members on this forum may be bad examples to paying less taxes, as many of them are obviously very well off.
Quote:
Quote:
...80 percent of all Americans will see their taxes reduced under the bill -- and the "losers" are limited to just five percent (largely upper income filers from high-tax blue states).
...80 percent of filers will get a tax cut, roughly 15 percent will see no change, and just five percent will get an appreciable tax increase
https://townhall.com/tipsheet/guyben...icans-n2424201
|
__________________
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!!
|
|
|
12-31-2017, 01:02 PM
|
#11
|
Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Santa Paula
Posts: 4,077
|
Quote:
Originally Posted by Senator
That seems like a good deduction. You never get the money, so you should not have to claim it.
Most of Americans will see a tax cut. Especially if they have kids. The members on this forum may be bad examples to paying less taxes, as many of them are obviously very well off.
|
I agree, Senator, this forum is what in statistics is called a biased sample. Most, if not all of our posters have got to be in the top 25% as far a net worth is concerned.
This was brought home to me in talking to my copilot, who was financially devastated by the heavy medical bills from his late wife.
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
|
|
|
12-31-2017, 10:10 PM
|
#12
|
Full time employment: Posting here.
Join Date: Jul 2004
Posts: 512
|
Has anybody heard of any of the major tax software companies adding a capability to this year's program to compute what the 2018 tax bill would be, given the numbers entered for 2017?
|
|
|
01-01-2018, 06:10 AM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
|
^^^ No, probably way too early to expect that.
__________________
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
|
|
|
01-01-2018, 07:44 AM
|
#14
|
gone traveling
Join Date: Apr 2011
Posts: 3,375
|
I expect higher taxes due to starting both RMD's & full SS.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|