My tax bracket isn’t changing. My total of state (income) and local (property) taxes is still under $10,000. And my mortgage is under $750K. eta: I expect still to itemize for a larger deduction than the doubled standard deduction.
So I think my taxes probably won’t change very much.
Do I have this much right? It seems to be hard to find a site that will walk me through all the changes. Has anyone found a good summary of what the final federal tax law changes turned out to be?
I got back my first new paycheck of the year and it has a slight reduction in federal income taxes. That’s the only real difference. Then again, I am single, don’t own a house, no kids, and am probably as straightforward and simple a tax-filer as there is, so I may be an exception.
Mine are likely going down slightly. My state and local taxes are over $10k, so I can’t deduct all of them, but I still will itemize, and the rate reduction makes up for it and then a bit.
If you itemize now and will itemize next year, you probably will be one of the losers under the new tax plan, or at least not come out very far ahead. That is because the doubled standard deduction comes with a reduction in the personal exemption, so you are going to be taxed on a higher amount of income in the first place vs the old system.
Edit to add:
I personally am likely to come out way ahead vs prior years as I take the standard deduction and also run a lot of my income through an S-Corp, and the tax changes benefit both of those things for most people.
I was going by something I read online back in January, maybe it got changed before the final bill was signed. Now, reading a list from Forbes on Jan. 22, it does look like my bracket did go down by a bit, and I assume that my withholding will be going down as well (it didn’t change for my February pension payments or my January SS payment, so we’ll see). So I save some there. But then I see that the personal exemption is going away and I have no idea how that’s going to affect my taxes assuming that I am still itemizing my deductions. I’m now going to go through my 2017 return and see if I can figure it out.
Yes, by quite a bit. My taxes will almost certainly go up. The cap on deducting property and state income taxes directly effects me. The increase in the standard deduction (which is not as large as it seems because they got rid of the personal exemption) will not cover the difference. I would say that the modern GOP can’t even cut taxes right but punishing blue states and funneling that money to red states even more than it already was was the point of the law.
Now I am afraid my taxes may go up a lot. Assuming that one’s tax bracket is based on Taxable Income, the elimination of the personal exemption appears like it is going to bump me into the next higher bracket. If that happens it looks like a 75% or more increase in my taxes, if I didn’t do anything else about it. I may need to take less from my IRA this year or something, to keep in the lower bracket. Fortunately I can do that for one year, but for next year I’m going to have to work out a better strategy.
I am in a blue state but I don’t see how that is affecting this increase. It’s happening because I itemize and my deductions are over $24K so that I will continue to itemize, so I don’t get the compensating benefit of the increased standard deduction. Talk about war on the middle class!
OK, climbing down off the cliff, I remembered/realized that a higher tax bracket only applies to the last bit of income over the previous bracket, so my increase would probably be more like 10%, and that’s almost entirely due to the increase in my taxable income due to the elimination of the personal deduction. 10% is bad enough but we can handle it, and I suppose that will be offset by a small amount by being in an overall lower bracket. So the increase may actually be 8% or 9%. That stays within the range of the refund I got this year, so at least it tentatively answers my question to myself about what to do about my withholding. I’ll leave it the same for this year and just get a significantly smaller refund.
My taxes will go down. Quite a bit. Enough that I am counting on the money to a) pay off the last of my debt and b) look at a new car/truck. Oh, and the vacation we were planning for later this year will be a bit nicer than expected.
I will be the first to say I have no idea how my taxes will pan out. Haven’t given it much thought. The new tax scam is a terrible idea even if I do get a few dollars more when the dust has settled.
(I don’t itemize, so from the tiny amount of facts I’m aware of the odds seem decent my taxes will go down by some negligible amount. Unfortunately.)
Like Quimby, I live in blue state with high state taxes, which I will not be able to write off now. But I was subject to AMT last year, and that is out of the picture.
Our income moves around from year to year, so it will be hard to do a direct comparison with last year, but I am not looking forward to doing my return as I expect I will have to come up with a chunk to pay. So, I’ll be thinking of sleestak’s new truck when I write out my check.
My taxes should be going up since I pay a lot of property tax. Also, since it looks like the republicans want to slash aid, the State services that my autistic daughter receives will likely go down. Sumbitches…
I haven’t seen a change in my withholding at the moment and given who I work for (they aren’t that fast on upgrading anything related to us employees) I don’t expect to. I may get a little more back but I got a feeling some of the things coming down the state and local pike could make it pretty much a zero-wash.
For people with 2 or more dependent kids, the loss of the exemptions is made up by increasing the amount of the child tax credit, and increasing the AGI that it begins to phase out. Before over 120ish and you didn’t qualify, now it’s 400K for married.
A married couple with 3 or more kids will likely pay quite a bit less in taxes, even in blue CA.