It will benefit you if you are young, healthy, don’t own a super-expensive house, don’t live in CA or NY, and don’t donate a lot of money every year.
Almost everyone thinks they’re solidly middle class. I think surveys show something like 90% of Americans identify as “middle class”. But if we divide the US into quintiles, and call “middle class” anyone in the 2nd, 3rd or 4th quintile, I think you’ll find that most of those folks do better under the new tax plan than before. As noted in the other thread, only about 35% of the population itemizes, and by my definition, 60% of the US is in the middle class. Assuming most of the top quintile itemizes (which I think is a fair assumption), only some small fraction of the “middle class” itemizes, and many of them will, in fact, do better with a higher standard deduction.
Are you certain you are going to be worse off if you make some reasonable assumptions about what the final bill will look like? Now, granted, this plan has lots of things wrong with it, but most Americans are going to get at least something of a tax cut from it. I don’t make any claims of being “middle class”, as I’m well into the top quintile and I live in a high SALT state and pay very, very high property taxes. I will get a much bigger tax bill by any calculations I’ve made.
I looked at the 2016 Schedule A, and the GST deduction is on there. It’s the only way for residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, (as well as most people in New Hampshire and Tennessee) to take this deduction. States with both types of tax can choose over the income or sales tax deductions.
What John Mace might be thinking of is that every few years this deduction does expire, and it is only restored at zero hour in December when congress has (thus far) gotten their shit together for a minute.
No, I really did think the sales tax deduction was eliminated. My mistake. But IIRC (and I might be wrong, again), you used to be able to deduct both as I seem to recall doing during some time in the 80s.
So, if deductibility of state income tax goes away, there is no knowing if state sales tax deduction goes away or stays?
I think sales tax is a goner no matter what:
I suppose it’s possible that the compromise bill might put sales taxes back in, but neither of the two bills allows for that deduction now.
It is in Washington (the state, not the city)
And don’t need to borrow money for an education. They want to keep the populace stupid so they can stay in power
Maybe I misunderstood, but there aren’t really any tax implications for student loans, are there? The change is that tuition waivers (basically, getting part / all of your tuition gifted to you by the institution) is now taxable, right?
Student loans are affected in the house bill.
Here’s a good summary, it seems to suggest that it was gone in 2014, so you might’ve been right, just for the wrong year. I stopped taking note since my mortgage isn’t high enough to make itemizing worth it anymore.
If this leads to fewer people taking out massive loans when they shouldn’t, ballooning the debt crisis, then I’d consider that a positive, not a negative.
In principle, most of the things they are eliminating I’m OK with. I wouldn’t do it all at once, and I wouldn’t let it increase the deficit like they’re doing, either, which means I wouldn’t structure things to favor the wealthy so much. But I’ve long been in favor of eliminating or reducing the mortgage interest deduction, and even SALT. But people have structured their finances with the current tax law in place, and making big changes like they are doing all at once can cause significant disruption. If my taxes have to go up, so be it, but I don’t want to pay more so that some gazzilionaire gets to pay less.
Fun thing about student loan interest, is that you get to take the deduction even if you are taking the standard deduction. So, there is no “only x% of students with loans take this deduction”, it is every student with a student loan. (unless they are really dumb.)
My understanding is that that deduction goes away.
That’ll be costing me $625 a year for a bit.
k9friender, that sucks!
Other deductions that are likely being eliminated:
From https://www.cbsnews.com/news/4-popular-deductions-the-gop-tax-plan-would-end/:
The Senate tax bill would also restrict natural-disaster deductions only to federally declared natural disasters. Currently, losses of property not covered by insurance from any natural disaster can be deducted. So this means that if a wildfire burns down your home, you more than likely will not get any tax relief since wildfires are rarely federally declared. Personally, I think that’s kind of fucked up.
The tuition and fees deduction sucks and most people take credits instead. I’m not sure what demographic class takes it instead of the credit, but I don’t think it’s low income people.
Alimony being taxable vs child support not has always been weird.
With Ryan openly bragging that the GOP leadership lied to Susan Collins to get her vote, is there any chance that she will come to her senses, and that there will be only 49 votes when the Trillion Dollar Ripoff gets back to the Senate for a re-vote?
I realize the House can avoid the need for a re-vote if it passes the Senate version word-for-word, but that version had provisions everyone agreed were serious flaws, no?
Here is my analogy. Your brother is quite rich, but has a cash flow problem. You need to fix a leaky roof, and your car is on its last legs. He suggests you take out a 100000 2nd mortgage, use $10k to fix the roof, then he will take the other $90K, put a down on the Mercedes he wants, and invest the rest in Bitcoins. Next year, you are supposed to borrow another $10000, get 9000, het gets the rest, etc.
He says that if his Bitcoin investments pay off well, he will pay off the whole loan. But you wont get any of the profit besides that.
However, if the Bitcoins fall thru, he keeps the Mercedes, but you have to pay it all back.
However, by-and-large, your Bro is piss poor at keeping his promises and there’s no signed paperwork with him.
Does anyone think this is a good deal?