@BAGB The claim about paying more tax is in the future when some of the deductions/credits are scheduled to expire. I doubt any politician would let that happen. They’d go down as the congress that raised taxes on the middle class. They’ll vote to extend them.
Maybe I did not read carefully. My impression is that many are saying that Californians will get a tax increase next year
Hey, at this rate, there will be no members left in both the House and Senate… no tax reform!!! Hurray!!!
Uh, bring those models to the Washington holiday parties after SV…
Did you forget Trump’s wife used to be a model? What did I say about men with supermodel wives?
Let’s just say The Donald is a whole different level. I always thought my Big Bro was arrogant…
As we have analyzed, most Californians and New Yorkers will have more after tax income. How can it tank the housing market? You lose state income and partial property tax deduction, but lower tax rate will save you more money, AMT was limiting your SALT deduction in old system anyway.
When Californians have more money in their pocket, housing price may rise instead of tumbling.
For a matter of fact, most Califonians will benefit from the tax reform. Media is wrong, maybe on purpose. Many people do not believe the media anyway.
If this is right, I agree !
If this wrong, do you think it impacts?
Prove this is wrong if you can.
BA home price will have nice appreciation in 2018. Bigger tax refund in 2019 will help the market as well.
Right now, many Californians, even highly educated tech workers, believe that this tax reform will increase their tax and may cause a recession in the next couple of years due to media’s misinformation and misleading. Even with this pessimistic outlook colored by the poor media, people are still overbidding for houses.
I think the younger workers really believe the media and really think that their tax bill rise. They are mostly renters anyway.
Housing market has its own course. Tax reform will have long term effects. If it’s really a big tax hike, over the long term, home price would appreciate slowly. A 10% home price decline for this whole market is laughable. The journalist is either uninformed or trying to mislead people on purpose.
I’ve posted the graph. Tax revenue in Kansas increased.
Behind the curtains, I read some people kissing the Putin lover’s rear end. They portray complaints from the media, except Foxnews, and Breit-fart and Infowars as fake news.
Rality is that an entire nations is seeing a bunch of ignorant congressmen bitching for 30 years about fixing the tax laws, but never had a “repeal and replacement law” in hand, same as in Obamacare, the ingrates and ignorant demagogues were too busy blaming the other party, with the applause of their supporters, some on this forum. Is this the new norm? Write as a high school boy in love some notes of your own hand on a very important document?
CPAs advise? Why? If they knew anything, they, by this time should have put you into something better, right? I am going to go for the people I know. We have cases in our office where the CPA has been doing the books for 20-30 years for a business, but never knew they could cut taxes by doing this and that? Gee! A company paying $1.2M in taxes ending up paying $60K? That is as much damaging as no paying taxes at all and get a ding from the IRS for it.
Other tax reforms have been done, and it has taken many months, or years to achieve. Why? Because unless you or them are ignorant, the tax law is a 70,000 page dude that can’t be changed in 15 days. So, what’s the rush? Why is it that they are finding that when you press A, M is going to be affected, and when you press M, it will hurt Z and D? Well, non other than complete ignorance that if the tax law has thousands of pages, it may be for a reason, don’t you think my dear dumb congressmen?
By the way, those “I don’t support him but Benghazi” people, stop being stupid. The flying on jets just to go and meet another republican somewhere, have a lunch and go back to Washington DC while we pay for it is what is causing so much distrust for government, which by the way, it is “government” on this forum, but never “the Trumputin’s government”, have you guys seen that? It is always that neutral “the government” of today, but xxxxxxx’s government if something is wrong with it.
since I get 0 SALT deduction due to AMT
Nope. That’s because you don’t understand your taxes. Just because you pay some AMT doesn’t mean you lost the benefit of the entire SALT deduction. That’s because the AMT has an exemption on the first $84,500 of income and is at the lower rate of 28%. For example, ignoring the additional effect of the $84.5K exemption, if you’re in the 35% fed bracket paying 9.6% state then you’d get a 35%-28% deductible benefit and lose the deduction on the last 2.6% of state tax. But as I said, the situation is actually a lot better than this because of the large up front exemption.
Now if the current house/senate bill were to pass you’ll lose the entire deduction.
Don’t believe me? Look at line 45 of your 1040. That’s how much AMT you paid. Ask yourself if your marginal rate (39.6%?) x your SALT deduction is more or less that number. For most homebuyers they won’t even be close. Then you may understand better.
I don’t get any AMT exemption because it phased out.
Anyway, my point was “why is average SALT deduction number NYT quoted so high?”.
People who pay AMT don’t get SALT deduction. That doesn’t mean that without SALT deduction, final tax would be same. However, if the person pays AMT at the end, is it fair to say that the person got SALT deduction? I guess not. Besides, after threshold to match AMT, any excessive SALT deduction won’t make any difference to final tax number.
I did quick math to calculate tax after reform. In my case, my tax goes down mainly due to lower temp tax rate. I haven’t calculated tax after temp tax rate expiration.
In spite of any tax benefit I can get, I don’t support Trump tax reform because of concern on deficit and funding cut on education/social programs. In addition, tax implication after my retirement is also a concern for me.
AMT has complex calculation.
In simple terms:
If you have 500000 income and your deduction (all deductions including SALT+others)…etc itemized that brings you final tax less than 26% (28%) percent of 500000 (i.e. 130000), then AMT Kicks off.
Assume Your income is 500k, you deduct all SALT+MIRD…etc and final IRS tax amount comes to $50000, your effective tax is 10% of original income. Then, IRS kicks of AMT calculation 26% of 500k = 130k.
Your calculated tax is 50k, As per AMT (Alternative minimum tax) is 130k, they ask you to pay 130k instead of 50k. Your AMT portion is tax is 80k
If I have 500k income and my itemized deduction are less than you and my calculated tax is 125k, then AMT says 130k for me too. But, my AMT portion is 5k
Here, for you and for me, after SALT is removed, our deductions are reduced, calculated tax will increase beyond 26% (or 28%) of income and we will never get into AMT.
As I said already, AMT is complex, what I presented in simple example. I still do not know why they made such a complexity !
Come on guys!
Tax declarations are going to be so easy. Like writing your uncle Sam on a postcard.
Hmmmm…where did I hear that postcard lie?..Somewhere…I can’t remember where…
I will post the final outcome here after I compare 2017 Vs 2018 tax return (this mean I can post it after Apr 2019).
With expanded standard deduction, 90% of the population won’t have to itemize. It’s high earners that’ll have to spend time doing their taxes.
I don’t get any AMT exemption because it phased out.
Completely phase out is at $498K (for married), which considering the lower brackets leaves an effective AMT rate of 35%. Regular rate is 39.6%, so my back of the envelope thought is that you still get half benefit for SALT though even for regular tax itemized deduction phase out starts at $313K with a 3% phaseout for the excess.
Sure, people who pay AMT don’t get SALT for AMT purposes. But the AMT is lower than the regular rate and you pay whichever is less. If you didn’t get have your itemized SALT deductions, you’d be paying more.
You’re right that to the extent that they pay AMT a larger itemized SALT deduction would not help them. But most people that pay AMT don’t even pay enough to cover the loss of their personal exemptions, and so have the benefit of all of their itemized SALT deduction.