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Message
re: Tax Reform Discussion Thread
Posted on 11/3/17 at 11:06 am to lnomm34
Posted on 11/3/17 at 11:06 am to lnomm34
quote:
Your numbers were off, but your calculations made me rerun mine. Somehow I screwed up the calculation for the taxes on the first $89,999.
It's a wash, basically for me. Looks like I'd owe around $500 less under the new plan using my 2016 numbers.
I know it won't work out better for everyone but when the difference between your itemized + exemptions were only $9,000 different than the new standard deductions, but you were showing $6,000 more owed in taxes then I knew something had to be off.
Can you link where you read that the Dependent Care FSA deduction would be taken away? This is something that my wife and I started using this year. That pretty much just means that they would disappear because they have no value (that I'm aware of) other than being pre-tax.
1
Posted on 11/3/17 at 11:07 am to AUtigerNOLA
No personal exemptions.
No state tax exemption.
No tax exclusion for up to $5,000 you may contribute to Dependent Care FSA.
No deduction for health care costs.
No state tax exemption.
No tax exclusion for up to $5,000 you may contribute to Dependent Care FSA.
No deduction for health care costs.
Posted on 11/3/17 at 11:08 am to SLafourche07
quote:
Can you link where you read that the Dependent Care FSA deduction would be taken away?
LINK
quote:
This is something that my wife and I started using this year. That pretty much just means that they would disappear because they have no value (that I'm aware of) other than being pre-tax.
Same here. And yep, that's what I understand as well.
Posted on 11/3/17 at 11:17 am to lnomm34
quote:
No tax exclusion for up to $5,000 you may contribute to Dependent Care FSA.
I didn't see this in the link you provided.
I saw that they didn't have the Dependent Care Savings Accounts that Trump had mentinoed, but that's something different than DCFSA's.
quote:
No deduction for health care costs.
For this, I'm assuming you mean they are getting rid of the medical cost itemized deduction, not the deductibility of health care premiums you pay through your employer. (If that were proposed I think more people would be talking about it. At least I would be
)Posted on 11/3/17 at 11:23 am to SLafourche07
quote:quote:
No tax exclusion for up to $5,000 you may contribute to Dependent Care FSA.
I didn't see this in the link you provided.
Try this one: LINK
quote:
Another blow for parents who want to take a tax break on child care expenses: employees will no longer be able to set aside up to $5,000 in a flexible spending account for child care expenses.
Or this one: LINK
quote:
Eliminates tax exclusion for dependent care assistance accounts: Today some employers provide parents the opportunity to save up to $5,000 of their income in a dependent care flexible spending account. That money is excluded from the parent's taxable income. The House bill would repeal that exclusion. The dependent care FSAs are disproportionately used by higher-income families, Maag said.
This post was edited on 11/3/17 at 11:27 am
Posted on 11/3/17 at 11:24 am to SLafourche07
Hopefully someone creats a calculator soon.
ETA: GOP should have had one ready to go.
ETA: GOP should have had one ready to go.
This post was edited on 11/3/17 at 11:25 am
Posted on 11/3/17 at 11:36 am to southernelite
quote:
GOP should have had one ready to go.
They should have, but they're also trying to rush this thing through. A calculator would show most people won't benefit from this as much as they're claiming they will, and opposition would build. They want to get it passed before vocal public opposition can form. It's a terrible way to govern, but that's not a discussion for this board.
Posted on 11/3/17 at 11:38 am to lnomm34
quote:
Try this one:
quote:
Or this one:
Thanks.
Yeah that would suck, but part of the loss of deductibility would be negated by being able to take advantage of the full Dependent Care credit. So it wouldn't be a full loss. Still sucks though.
Well, if this passes then my wife's employer better let us stop the damn contributions.
Posted on 11/3/17 at 11:48 am to lynxcat
Being lazy here...anybody ready anything about proposed changes to capital gains taxes?
Posted on 11/3/17 at 12:36 pm to arkiebrian
0% tax on first 12,000 for Single 24,000 for Married.
I think people are missing that. The old way it was 10% on the first 9,275 for Single.
I think people are missing that. The old way it was 10% on the first 9,275 for Single.
Posted on 11/3/17 at 12:39 pm to Ray Finkle
Simple question, this tax bill would go into effect for the 2018 calendar year? Or, does it retroactively apply to all of 2017?
Posted on 11/3/17 at 12:44 pm to Ray Finkle
quote:
0% tax on first 12,000 for Single 24,000 for Married. I think people are missing that. The old way it was 10% on the first 9,275 for Single.
That's not how it works.
I don't understand why people are trying to explain it this way instead of starting with income and subtracting out deductions.
Posted on 11/3/17 at 12:49 pm to SLafourche07
Under the House bill, The Tax Cuts and Jobs Act, there will be four: 12 percent, 25 percent, 35 percent and 39.6 percent, according to The Wall Street Journal. The bill roughly doubles the standard deduction to $12,000 for single filers and $24,000 for married couples.
The 12 percent bracket: This rate applies to single filers starting at $12,000 up to $45,000. For married joint filers, this applies after the $24,000 deduction up to $90,000.
The 25 percent rate: This begins at $45,000 for single filers and $90,000 for joint filers who are married.
The 35 percent rate: Single filers reach this bracket at $200,000. This rate applies to married filers at $260,000.
The 39.6 percent rate: This rate applies at $500,000 for singles and $1 million for married couples.
The 12 percent bracket: This rate applies to single filers starting at $12,000 up to $45,000. For married joint filers, this applies after the $24,000 deduction up to $90,000.
The 25 percent rate: This begins at $45,000 for single filers and $90,000 for joint filers who are married.
The 35 percent rate: Single filers reach this bracket at $200,000. This rate applies to married filers at $260,000.
The 39.6 percent rate: This rate applies at $500,000 for singles and $1 million for married couples.
Posted on 11/3/17 at 12:51 pm to SLafourche07
If what you're saying is that it is easier to start from AGI before applying your brackets than to try to apply a hypothetical 0% rate to account for the SD, I agree.
For Republican messaging purposes, though, they should absolutely talk up the expansion in the "0% tax bracket"
For Republican messaging purposes, though, they should absolutely talk up the expansion in the "0% tax bracket"
Posted on 11/3/17 at 12:57 pm to Ray Finkle
That article is wrong unless they are completely changing how taxes are calculated.
Say you're single and make $50,000.
The way they word it you would pay:
0% on the first $12,000
12% on 12,001 - $45,000 = $3,960
25% on $45,001 - $50,000 = $1,250
Total: $5,210
How it actually is:
You make $50,000. Standard Deduction is $12,000. Taxable income is $38,000.
12% on the first $45,000: $4,560
Total: $4,560
Say you're single and make $50,000.
The way they word it you would pay:
0% on the first $12,000
12% on 12,001 - $45,000 = $3,960
25% on $45,001 - $50,000 = $1,250
Total: $5,210
How it actually is:
You make $50,000. Standard Deduction is $12,000. Taxable income is $38,000.
12% on the first $45,000: $4,560
Total: $4,560
Posted on 11/3/17 at 1:00 pm to RedStickBR
quote:
If what you're saying is that it is easier to start from AGI before applying your brackets than to try to apply a hypothetical 0% rate to account for the SD, I agree
This is what I'm saying.
quote:
For Republican messaging purposes, though, they should absolutely talk up the expansion in the "0% tax bracket
I agree. But the way that article is trying to word it just adds to the confusion.
Posted on 11/3/17 at 1:06 pm to SLafourche07
I'm confused too.
Are we talking about straight up taxable income after the 12,000 deduction for a standard filer?
I took it as them saying you don't get charged a dollar on any taxable income under $12,000. then Dollar 1 rate would be 12%. I could be totally off here but that's how it reads.
Are we talking about straight up taxable income after the 12,000 deduction for a standard filer?
I took it as them saying you don't get charged a dollar on any taxable income under $12,000. then Dollar 1 rate would be 12%. I could be totally off here but that's how it reads.
Posted on 11/3/17 at 1:11 pm to SLafourche07
You nailed it. The second method shifts all income beyond the SD down into lower brackets. If you treat the SD as a 0% bracket, all of your income above the SD is being overtaxed.
Posted on 11/3/17 at 1:20 pm to RedStickBR
I believe you're right.
They need to say Taxable Income when discussing the brackets. So it is 12% up to 45,000 of taxable income. $5,400 in the first bracket tier.
They need to say Taxable Income when discussing the brackets. So it is 12% up to 45,000 of taxable income. $5,400 in the first bracket tier.
Posted on 11/3/17 at 1:23 pm to SLafourche07
Ok so say you are at the 150k mark jointly.
150k-24K deduction
126k adjusted
90K*.12 = 10,800
Remaining 36k at 25% = $9k.
Total tax: 19,800?
Could be off with other calculations.
150k-24K deduction
126k adjusted
90K*.12 = 10,800
Remaining 36k at 25% = $9k.
Total tax: 19,800?
Could be off with other calculations.
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