Do you see a meaningful change in your income with new Tax Bill?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Ron Scott
Posts: 586
Joined: Tue Apr 05, 2016 5:38 am

Do you see a meaningful change in your income with new Tax Bill?

Post by Ron Scott » Fri Dec 22, 2017 11:20 am

(Now that its signed I'm guessing we've got permission to talk outside one official thread...)

Anyway, I couldn't find a good calculator out there for year-to-year comparisons but it seems to me I'll benefit to the tune of some lunch money.

I'm losing $60k+ in SALT deductions and gaining in reduced rates, but I just retired this year with large 2017 income and I'm headed into the world of managed income, so I haven't done a good comparison between the current and 2018 tax plans.

How about you?

livesoft
Posts: 60977
Joined: Thu Mar 01, 2007 8:00 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by livesoft » Fri Dec 22, 2017 11:21 am

My income won't change. I won't be working any more nor any less and neither will my spouse.

And we have already been doing the following for years:

1. DAF
2. Bunching deductions
3. No mortgage interest

What will change is that our youngest should not be a dependent anymore and we will get less tax credits, but that was going to happen regardless of any tax law changes.
Last edited by livesoft on Fri Dec 22, 2017 11:24 am, edited 3 times in total.
Wiki This signature message sponsored by sscritic: Learn to fish.

Mike Scott
Posts: 824
Joined: Fri Jul 19, 2013 2:45 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Mike Scott » Fri Dec 22, 2017 11:23 am

Income stays the same. Next years taxes look like a wash based on what I know now.

Jags4186
Posts: 2118
Joined: Wed Jun 18, 2014 7:12 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Jags4186 » Fri Dec 22, 2017 11:27 am

We’ll see an increase of about $3200 in after tax income. We presently take the standard deduction.

We are looking to purchase a home and if I do a pro forma on the type of house we’ve budgeted for with the old vs new plan, the new tax plan will cost us $2000 once you account for the removal of SALT and mortgage interest (i.e. not itemizing).

Not ideal, but I’d rather have it this way vs. already owning the home and having $2000 taken out of my pocket.
Last edited by Jags4186 on Fri Dec 22, 2017 11:30 am, edited 1 time in total.

peppers
Posts: 1326
Joined: Tue Oct 25, 2011 7:05 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by peppers » Fri Dec 22, 2017 11:27 am

Not really.
"..the cavalry ain't comin' kid, you're on your own..."

onourway
Posts: 1093
Joined: Thu Dec 08, 2016 3:39 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by onourway » Fri Dec 22, 2017 11:28 am

We'll see what actually happens. I've tried a number of the calculators out there and most put us at +$4-6k. Married, 3 kids, high tax state. Previously itemized.

User avatar
DaftInvestor
Posts: 3921
Joined: Wed Feb 19, 2014 10:11 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by DaftInvestor » Fri Dec 22, 2017 11:29 am

Ron Scott wrote:
Fri Dec 22, 2017 11:20 am

Anyway, I couldn't find a good calculator out there for year-to-year comparisons but it seems to me I'll benefit to the tune of some lunch money.
Try this:
http://taxplancalculator.com/
Missing AMT and some corner cases - but if your taxes aren't too complex its a nice compare

flyingaway
Posts: 1704
Joined: Fri Jan 17, 2014 10:19 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by flyingaway » Fri Dec 22, 2017 11:31 am

I don't care. I will just buy a tax software and I believe it will sort everything out.

Chief_Engineer
Posts: 23
Joined: Wed Jan 15, 2014 9:32 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Chief_Engineer » Fri Dec 22, 2017 11:31 am

We will see about a 5% increase in take-home pay than we would have under the old tax law. This is mostly due to the increased phase-out threshold for the child tax credit and lower tax brackets.

We live in a low tax state and rent, so we would've claimed the standard deduction no matter what. Our taxes are simple so I was able to do the calculations myself.

ebrasmus21
Posts: 182
Joined: Tue Nov 29, 2016 6:06 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by ebrasmus21 » Fri Dec 22, 2017 11:34 am

Based on http://taxplancalculator.com/ it looks like we'll be up 3 or 4 grand.

User avatar
TomatoTomahto
Posts: 7296
Joined: Mon Apr 11, 2011 1:48 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by TomatoTomahto » Fri Dec 22, 2017 11:36 am

DaftInvestor wrote:
Fri Dec 22, 2017 11:29 am
Ron Scott wrote:
Fri Dec 22, 2017 11:20 am
Anyway, I couldn't find a good calculator out there for year-to-year comparisons but it seems to me I'll benefit to the tune of some lunch money.
Try this:
http://taxplancalculator.com/
Missing AMT and some corner cases - but if your taxes aren't too complex its a nice compare
I hope so. Our CPA estimated that we'd be paying more in taxes. The web site estimated we'd save $28k. I hope that the web site is right :D

Fwiw, we don't have mortgage interest, our charitable contributions are modest, and our deductions have been mostly property tax and state taxes. It is difficult to see how we don't get more hammered by the new law, but time will tell.

jebmke
Posts: 7897
Joined: Thu Apr 05, 2007 2:44 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by jebmke » Fri Dec 22, 2017 11:39 am

Unless I shift from national munis to state specific I don't see how my income would change (other than factors outside my control). Not likely to do that. The national ones are more diversified and every time I look at the state funds, the rate difference implies that the advantage has been eaten up by arbs.
When you discover that you are riding a dead horse, the best strategy is to dismount.

dbr
Posts: 27017
Joined: Sun Mar 04, 2007 9:50 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by dbr » Fri Dec 22, 2017 11:41 am

Increased standard deduction less loss of exemptions will net a little bit after tax as long as it lasts.

If it really happens that tax change drives stock market up more than otherwise would have happened most investors here will benefit.

If the question is really about income, the question is whether this tax bill will in fact result in an economic boost to jobs and income.

jdilla1107
Posts: 588
Joined: Sun Jun 24, 2012 8:31 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by jdilla1107 » Fri Dec 22, 2017 11:41 am

It looks like I'll save between 2 and 4 thousand, which isn't very interesting to me. (It's also very hard to estimate with AMT, capital gains, qualifed dividends, and so on) But what is interesting is that it looks like my marginal tax rate is going from 33% to 24%, which creates some new situations like:

- Muni bonds may no longer provide any advantage over taxable bonds.
- Makes roth 401ks look better than before.

I also lose my charitable deduction, so just did a DAF for 5 years of giving.
Last edited by jdilla1107 on Fri Dec 22, 2017 3:02 pm, edited 3 times in total.

Johnny Thinwallet
Posts: 66
Joined: Wed Nov 21, 2012 6:07 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Johnny Thinwallet » Fri Dec 22, 2017 11:42 am

My estimate of our federal tax savings is roughly $2,400.

We're MFJ with one baby and have taken the standard deduction since getting married. We lose the three exemptions, but we gain a bigger standard deduction, a bigger child tax credit and a slightly lower marginal tax rate.

User avatar
DaftInvestor
Posts: 3921
Joined: Wed Feb 19, 2014 10:11 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by DaftInvestor » Fri Dec 22, 2017 11:44 am

TomatoTomahto wrote:
Fri Dec 22, 2017 11:36 am
DaftInvestor wrote:
Fri Dec 22, 2017 11:29 am
Ron Scott wrote:
Fri Dec 22, 2017 11:20 am
Anyway, I couldn't find a good calculator out there for year-to-year comparisons but it seems to me I'll benefit to the tune of some lunch money.
Try this:
http://taxplancalculator.com/
Missing AMT and some corner cases - but if your taxes aren't too complex its a nice compare
I hope so. Our CPA estimated that we'd be paying more in taxes. The web site estimated we'd save $28k. I hope that the web site is right :D

Fwiw, we don't have mortgage interest, our charitable contributions are modest, and our deductions have been mostly property tax and state taxes. It is difficult to see how we don't get more hammered by the new law, but time will tell.
What reason did your CPA give for paying more? It likely depends upon how high your property tax and state taxes are whether or not the doubling of the standard deduction along with the marginal tax rate decreases will benefit you or not.
I wonder if this will impact populations in high-tax states in the coming years.

(gekko)
Posts: 38
Joined: Mon Oct 16, 2017 12:14 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by (gekko) » Fri Dec 22, 2017 11:49 am

My estimate is that I’ll get around $3000. I’ll go Roth from this year until it expire (if it does).

DrGoogle2017
Posts: 1322
Joined: Mon Aug 14, 2017 12:31 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by DrGoogle2017 » Fri Dec 22, 2017 11:55 am

It’s a wash for us. But our kids timed it right regards to when to leave the nest. This is the last year we can claim them anyway. I’m also glad we had our last large foreign tax credit this year. So our timing can’t be beaten.
But I originally had planned to convert larger Roth amount, now I just scale back and wait and see for clearer instructions from the IRS. But hopefully the rise in equities is more than make up for the tax loss. We don’t do Roth recharacterization, so it’s not a big deal on that front either. Less headaches in playing games to maximize our returns.
Last edited by DrGoogle2017 on Fri Dec 22, 2017 12:22 pm, edited 2 times in total.

Mike Scott
Posts: 824
Joined: Fri Jul 19, 2013 2:45 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Mike Scott » Fri Dec 22, 2017 11:59 am

While the new tax estimates at this point seem pretty robust for many people; I expect that the greatest unpredictable piece of financial planning will show up in volatile health insurance costs. From a strictly financial standpoint, I fully expect that changes in health insurance costs will continue to completely overwhelm any changes in my tax status going forward.

AlwaysaQ
Posts: 463
Joined: Fri Apr 13, 2007 7:37 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by AlwaysaQ » Fri Dec 22, 2017 12:00 pm

I would save a few thousand in federal tax because of the change in the tax brackets. I have been in the 25% marginal tax bracket for a few years and now will probably be in the 22% bracket instead. I haven't itemized in many years and for 2017 I used QCDs for charitable giving.

annielouise
Posts: 231
Joined: Wed May 14, 2008 4:11 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by annielouise » Fri Dec 22, 2017 12:00 pm

I put a good guess of 2018 income numbers through the previous tax code for 2018 and the new one. Since we paid off our house this year, it wouldn't make sense to compare to 2017 or previous years. The new tax code increases our income by about $3200. We already spend less than half of our after tax income, so no real impact to our lives.

Dantes
Posts: 190
Joined: Wed Feb 25, 2015 6:38 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Dantes » Fri Dec 22, 2017 12:00 pm

No, not meaningful.

We've claimed standard deduction for a few years now, so we get a bit of benefit from the slight increase provided by the new deduction amount (compared to the previous deduction plus exemption amount), and the slightly lower tax rate. Its way less than, say, a decent raise.

KATNYC
Posts: 434
Joined: Fri Apr 07, 2017 4:34 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by KATNYC » Fri Dec 22, 2017 12:02 pm

No, no income changes beyond raises in March.
With SALT/RE cap we'd hit only $8K in deductions (mortgage & RE taxes are comparatively low for NYC) + charity.
SALT, mortgage interest & re taxes hit $23K + $8,100 in exemptions (2 people) + charity which fluctuates (more due to hurricanes this year).

bsteiner
Posts: 3268
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by bsteiner » Fri Dec 22, 2017 12:04 pm

Taxpayers who've been in the AMT couldn't get personal exemptions or state and local taxes. Many of them will no longer be in the AMT, and will now get $10,000 of state and local taxes.

The joint return brackets will be twice the width of the single brackets through the 24% bracket (up to $315,000 joint). That will let more married IRA owners do Roth conversions at 24% or less.

The estate and gift tax exclusion amount and the GST exemption will be doubled for 2018 through 2025. High net worth taxpayers will be able to give an additional $5.6 million ($11.2 million) free of transfer tax while this window is open. While this won't affect very many taxpayers, it will provide a substantial benefit for those whom it affects.

Bacchus01
Posts: 1646
Joined: Mon Dec 24, 2012 9:35 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Bacchus01 » Fri Dec 22, 2017 12:05 pm

From a tax perspective, we expect to see a $18K decrease in our federal taxes. Depending on AMT and some other things, it could be as low as $10K, but it's very significant.

The calculator above shows $13,850 reduction for us. But using some other calculators with more specificity I came up to closer to $18K. I don't think either is taking AMT correctly nor is the first one accurately reflecting my state taxes and thus their deduction for 2016, so that probably reduces both a little.

I'll call it ~$15K and be pretty darn excited.

It also means that because of a lower bonus in 2018, our AGI will fall below $335K, which keeps us in the 24% marginal bracket. Therefore I cancelled our NQ deferred income election for 2018, further increasing our take home pay.

Overall I expect my take-home pay to increase by ~$20K despite gross pay decreasing by about ~$40K
Last edited by Bacchus01 on Fri Dec 22, 2017 12:12 pm, edited 3 times in total.

TwstdSista
Posts: 805
Joined: Thu Nov 16, 2017 4:03 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by TwstdSista » Fri Dec 22, 2017 12:05 pm

Yep. We should save about $3500 in federal taxes (using this years numbers). That's a decent amount for us!

Carson
Posts: 534
Joined: Fri May 09, 2014 3:26 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Carson » Fri Dec 22, 2017 12:06 pm

All the puts and takes show my net tax/credits are $2,400 better than under the previous rates. We have a pretty simple 'accumulation phase' MFJ situation with 2 kiddos and benefit from the higher child credit as well as it not getting phased out at our income level.

I'm sure I will do something like save the difference, just like any other pay increase or found money. Boring!
30-something personal finance enthusiast, just get getting started on this whole portfolio thing.

retire57
Posts: 376
Joined: Fri Oct 28, 2016 3:03 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by retire57 » Fri Dec 22, 2017 12:07 pm

Thanks for the calculator link. Looks like we'll save about $850.

AZAttorney11
Posts: 454
Joined: Wed Jan 21, 2015 12:12 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by AZAttorney11 » Fri Dec 22, 2017 12:08 pm

We are going to save a substantial amount. Very excited for the next 10 years (hopefully the cuts will become permanent)!

Diogenes
Posts: 602
Joined: Sat Mar 03, 2012 3:58 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Diogenes » Fri Dec 22, 2017 12:12 pm

Definite significant reduction in tax liability. About $3600-$4200!!!

User avatar
flamesabers
Posts: 1719
Joined: Fri Mar 03, 2017 12:05 pm
Location: Rochester, MN

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by flamesabers » Fri Dec 22, 2017 12:13 pm

It looks like I'll be saving a few hundred in taxes for 2018.

marklar13
Posts: 97
Joined: Wed Jul 08, 2015 11:47 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by marklar13 » Fri Dec 22, 2017 12:14 pm

Looks like we will save around $500 next year -- so I'll probably aim to keep our witholdings unchanged.

Capped SALT deductions really hurts us, but the other benefits seem to make up the difference in our case. Will be switching to standard deduction and using the beefed up child tax credit (1 kid). I'm not thrilled with the bill because of the SALT cap really brings down the value for us (and we just moved to a house/state with very high property taxes and state taxes), but overall my taxes aren't going up so I guess I shouldn't really complain.

Gnirk
Posts: 776
Joined: Sun Sep 09, 2012 3:11 am
Location: Western Washington

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Gnirk » Fri Dec 22, 2017 12:14 pm

Retired, no debt, 90% of investments are in taxable accounts, take the standard deduction. A slight increase, maybe.

User avatar
ClevrChico
Posts: 1187
Joined: Tue Apr 03, 2012 8:24 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by ClevrChico » Fri Dec 22, 2017 12:15 pm

Yes. The online calculator reported we'd pay $7k less in federal taxes. (Higher standard deduction + lower bracket + child tax credit changes.)

I have to say, that is unexpected. I guess we're more in the sweet spot than others for being able to take advantage.

There is speculation about big stock market gains due to the changes, which could could be the biggest benefit to investors with the tax change.

Dottie57
Posts: 3418
Joined: Thu May 19, 2016 5:43 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Dottie57 » Fri Dec 22, 2017 12:15 pm

I'll save about 2k.

knowledge
Posts: 107
Joined: Wed Mar 02, 2011 5:44 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by knowledge » Fri Dec 22, 2017 12:26 pm

I'm estimating about a $12k reduction in federal taxes for 2018. This is due to eliminating the AMT and the much higher CTC income phaseouts, with everything else coming out as a wash. I don't know what the state income tax will be, but overall, it is meaningful.

harikaried
Posts: 1197
Joined: Fri Mar 09, 2012 3:47 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by harikaried » Fri Dec 22, 2017 12:28 pm

At a glance, the income taxes we would pay goes down by about 20%. Half of that savings is from now being able to use the child tax credit.

oxothuk
Posts: 328
Joined: Thu Nov 10, 2011 8:35 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by oxothuk » Fri Dec 22, 2017 12:28 pm

We’ll save about$3K. Beats a poke in the eye.

We have two grown kids, one in the sweet spot (Louisiana) and the other in the bullseye (California)

arsenalfan
Posts: 558
Joined: Mon Dec 09, 2013 12:26 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by arsenalfan » Fri Dec 22, 2017 12:31 pm

Not sure what to believe.
When I use the 2 calculators they indicate I will pay ~$2-6k less tax under the new plan.
https://www.frugalprofessor.com/model-o ... ompromise/
http://taxplancalculator.com/

How is that so with my Schedule A averaging $100k per year for me - including $60k SALT and $16k property tax that will be wiped out.

I understand my top bracket is now 37% - I guess that more than offsets the loss of $66k of SALT deduction?

blinx77
Posts: 226
Joined: Sat Jan 07, 2012 11:23 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by blinx77 » Fri Dec 22, 2017 12:34 pm

I have a lot of deductions (high tax state, big mortgage at the start of a 30 year term) and the value of those will decrease with capped SALT deduction, but I'll get credits for my two kids (previously was just barely over income). Net benefit of $2,000.

Bacchus01
Posts: 1646
Joined: Mon Dec 24, 2012 9:35 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Bacchus01 » Fri Dec 22, 2017 12:36 pm

arsenalfan wrote:
Fri Dec 22, 2017 12:31 pm
Not sure what to believe.
When I use the 2 calculators they indicate I will pay ~$2-6k less tax under the new plan.
https://www.frugalprofessor.com/model-o ... ompromise/
http://taxplancalculator.com/

How is that so with my Schedule A averaging $100k per year for me - including $60k SALT and $16k property tax that will be wiped out.

I understand my top bracket is now 37% - I guess that more than offsets the loss of $66k of SALT deduction?
Our schedule A is not that high, closer to $55K with $39K being SALT.

I’ve run it through several calculators as well as done a number of hand calculations. We are going to save about $13K. The wider low marginal bands, the CTC which we get now and didn’t get before, and the AMT impact is huge.

nolesrule
Posts: 620
Joined: Thu Feb 26, 2015 10:59 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by nolesrule » Fri Dec 22, 2017 12:37 pm

I made a second tax projection spreadsheet for next year using old tax law and new tax law. Our base pay will save approximately $4300... $4k of which is being able to claim the CTC. I also did a separate calculation to add in potential bonuses and nominal pay increases next year. The gap increases by 8.5% of the additional income, which is the difference between the old AMT rate of 32.5% and the new 24% bracket.

We won't be itemizing anymore.

investing1012
Posts: 182
Joined: Sun Aug 07, 2016 5:19 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by investing1012 » Fri Dec 22, 2017 12:44 pm

I'd save $22K per year according to the calculator. I'm in the top 0.5% in income and live in a no state income tax state.
Last edited by investing1012 on Fri Dec 22, 2017 12:48 pm, edited 1 time in total.

ohmygodabear
Posts: 18
Joined: Mon Aug 21, 2017 5:49 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by ohmygodabear » Fri Dec 22, 2017 12:45 pm

I'll save 2k this year.

Probably will never bother to buy property in CA under new rules. Property tax has more political risk than I'd expected.

ANC
Posts: 139
Joined: Sat Mar 01, 2014 7:59 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by ANC » Fri Dec 22, 2017 12:49 pm

In the short run, it would lower taxes slightly. We are of moderate income and have taken the standard deduction about 2/3 of the time since the 1986 act. In the long run it's too soon to tell, noting that many provisions sunset around 2025 and the the last tax cut of this size (in 1981) was followed by several tax increases over the next dozen years.

On the wealth side, I see slower growth in the value of our Bay Area home. This is the right thing but not the best means -- improved land use policies and more housing supply would be better.

User avatar
TomatoTomahto
Posts: 7296
Joined: Mon Apr 11, 2011 1:48 pm

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by TomatoTomahto » Fri Dec 22, 2017 12:55 pm

DaftInvestor wrote:
Fri Dec 22, 2017 11:44 am
TomatoTomahto wrote:
Fri Dec 22, 2017 11:36 am
DaftInvestor wrote:
Fri Dec 22, 2017 11:29 am
Ron Scott wrote:
Fri Dec 22, 2017 11:20 am
Anyway, I couldn't find a good calculator out there for year-to-year comparisons but it seems to me I'll benefit to the tune of some lunch money.
Try this:
http://taxplancalculator.com/
Missing AMT and some corner cases - but if your taxes aren't too complex its a nice compare
I hope so. Our CPA estimated that we'd be paying more in taxes. The web site estimated we'd save $28k. I hope that the web site is right :D

Fwiw, we don't have mortgage interest, our charitable contributions are modest, and our deductions have been mostly property tax and state taxes. It is difficult to see how we don't get more hammered by the new law, but time will tell.
What reason did your CPA give for paying more? It likely depends upon how high your property tax and state taxes are whether or not the doubling of the standard deduction along with the marginal tax rate decreases will benefit you or not.
I wonder if this will impact populations in high-tax states in the coming years.
I'm tending to believe my CPA more than the web site.

Our property taxes are around $35k. Our state income tax for 2016 was a lowish six digit amount. Our income is expected to go up, and did in 2017.

I personally don't see how we could come out ahead just by the reduction in marginal tax rate. Mind you, I'm not complaining and am fully aware that we are very lucky. However, I don't see any way, short of becoming a pass-through (impossible, I think) that our taxes will go down.

Disclosure: we are considering changing state of residence, and the $28k included moving to another high, but not as high, tax state. In our current state, we are projected by the web site to save $6k.

User avatar
Sheepdog
Posts: 5005
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Sheepdog » Fri Dec 22, 2017 12:57 pm

Nerdwallet has published how the tax bill will affect your taxes with your income.

How will your tax bracket change under the new tax bill?https://www.nerdwallet.com/blog/taxes/f ... -brackets/
Last edited by Sheepdog on Fri Dec 22, 2017 12:58 pm, edited 1 time in total.
People should not say everything they think. They should think about everything they say.

sevenseas
Posts: 176
Joined: Tue May 28, 2013 8:44 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by sevenseas » Fri Dec 22, 2017 12:58 pm

I am in about the worst possible situation when it comes to the new bill: single, no kids, W2 employee, high state/local taxes, just bought a house (no mortgage, high property taxes) this year, county won't let me prepay next property tax installment, my marginal rate will go up, lose the employee home office deduction...I'm sure there is other stuff that I've missed! Doing my taxes in 2019 is gonna hurt...at this point I'm just trying not to think too much about it. Only bright spot: I opened a DAF last year so am going to use that to offload some appreciated shares that have been spitting out huge capital gains. Oh, and that it could have been even worse (i.e. original talk about limiting 401K contributions and charitable deductions...)

Broken Man 1999
Posts: 1127
Joined: Wed Apr 08, 2015 11:31 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Broken Man 1999 » Fri Dec 22, 2017 1:02 pm

Not sure what change is meaningful, but we will pay about $2200-$2500 dollars less in taxes. I can either pay at a lower level, or add some more $$$ to our portfolio withdrawals and pay the same taxes as this year.

Either way we are better off. We don't itemize, but that is not a bad thing as we have no mortgage, real estate taxes are low, no state income tax, and our medical insurance is very good.

I hope the various charities aren't impacted excessively; I haven't changed our giving despite being unable to itemize for several years. Hopefully the giving will continue from those who will probably be better off taking the standard deductions. Income tax reduction was never my reason to give.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

Slacker
Posts: 558
Joined: Thu May 26, 2016 8:40 am

Re: Do you see a meaningful change in your income with new Tax Bill?

Post by Slacker » Fri Dec 22, 2017 1:08 pm

I estimate about a 1.5-2% increase in take home pay. Is that "meaningful"?

However, I'll likely put us partially into Roth 401Ks at work and balance it back at to net zero change in take home pay.

Post Reply