That's a joke, right?
What time are they saving that is more valuable than money?
That's a joke, right?
But the deduction and exemption changes expire too, so we will just be back to par - almost. The one change that is permanent is the CPI formula used to calculate the tax brackets. The old formula overestimated inflation and was causing brackets to creep upwards. I.e. real inflation was not keeping up with the brackets, so in effect we were getting a tiny tax cut every year. This has been used as the main attack from critics by saying that in 9 years you will pay more than you would have. This was the responsible thing to do, but the messaging around this has been very hard to win.
Anyone who lists a deduction of $100K mortgage interest on Schedule A will surely receive an IRS inquiry. The deduction for mortgage interest is limited to $1.1 million mortgage debt (less going forward). $100K of interest suggests either (1) paying a 9% mortgage interest rate - not likely, or (2) deducting interest paid on mortgage debt far in excess of $1.1M - not allowed.White Coat Investor wrote: ↑Wed Jan 31, 2018 5:11 pmWhy is this interesting? .. I'm sure there are plenty of people with $100K of mortgage interest alone in the Bay Area!
I think that point is largely invalid. The taxpayer making $100M who lives in NY, CA or NJ is likely to lose $10M or more in state and local tax deduction, which at 37% will cost more in tax than the 2.6% rate reduction saves. No reason to feel sorry for the taxpayer, but assuming that type taxpayer comes out way ahead is not correct.libralibra wrote: ↑Thu Feb 01, 2018 1:12 pmAnother point that I noticed was used very effectively was that while all the brackets dropped 2-3%, only the top bracket is unlimited. I.e. all the other brackets produce a finite savings per person, but the the top bracket's numbers can become huge (e.g. 2.6% off 100m income) which the critics used to clobber the stats. I really wondered if they could have left the top rate alone (maybe just raised the starting point a lot like they did with AMT) and avoided the messaging loss.
"Temporary" like Bush tax cuts and PMI deductibility. No congress is going to let individual tax brackets rise. Likely many congresses would let the corporate tax rates return to pre-cut rates. The bill was written very shrewdly.JoeRetire wrote: ↑Thu Feb 01, 2018 12:04 pmRemember the bracket changes are temporary. If your win is dependent on the new tax brackets, you'll start to give it back in a few years. At that point in time for most people it will become a loss.CantPassAgain wrote: ↑Wed Jan 31, 2018 2:00 pm2017 MFJ with one child:
Standard Deduction $12,700
Personal Exemption $4,050 x 3 = $12,150
10% up to $18,650
15% $18,651 to $75,900
25% $75,901 to $153,100
28% $153,101 to $233,350
Child tax credit $1,000 for each child (max before phaseout)
2018 MFJ with one child:
Standard Deduction $24,000
Personal Exemption - None
10% up to $19,050
12% $19,051 to $77,400
22% $77,401 to $165,000
24% $165,001 to $315,000
Child tax credit $2,000 for each child (max before phaseout)
For most people this is a win
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