Amazing! Screwed by the Democrats and about to be screwed by Republicans. Why bother?

[Willie99]

Willie, is anything gonna happen with long term capital gains? i got murdered under Barry going from 15% to 20% plus the 3.8% for Obamacare (did I mention Humana cancelled my plan and i have no insurance) - also, how about short term capital gains

No proposal to change current capital gains tax rates. Short term rates are taxed at the same rates as ordinary income

The Obamacare taxes are supposed to be eliminated

It sounds as if you might be paying AMT, that tax is being repealed so it could save you there

 

[JDeuce]

From what I've seen so far, this tax plan isn't really tickling my funny bone. It's still very deduction-heavy and looks like a dimocrap-lite plan to be. Why? Why the fuck do we keep going down this road? Sorry, Donald...you've done a lot of good since taking office. But you can do a lot better here.

This is not a fundamental restructure of the tax code, they are simply moving puzzle pieces to different locations. And guess what? Those pieces can easily be moved right back to where they are now if the dimocraps ever return to power.

Why not burn the whole fucking thing to the ground and move to a flat tax? 15% for everyone and be done with it. Guess what else that does? It means if dimocraps ever did come back into power, they'd need to start from square one if they wanted to rebuild the currently convoluted and fucked tax structure we have today. That would take a generation, at the very least...and it'd be a very difficult road for them.

I'm not saying this plan is all bad, there are some positive things in it. However, if you don't like today's tax code, dims and RINOs could return us right where we are now within a matter of minutes if they ever take the reigns again, if not lead us to an even more oppressive place. Don't fool yourself into thinking they won't.

Oh, btw...where is the elimination of health insurance as a mandatory purchase?

 

[Willie99]

Willie, I read they are changing the brackets and making less of them. You could go up a bracket from where you were when they're were more
and end up in a higher one and lose any tax break benefits...

Any word on this?

Old brackets for married couple

0 - 19,000 10%
19,000 - 76,000 15%
76,000 - 153,000 25%
153,000 - 233,000 28%
233,000 - 417,000 33%
417,000 - 471,000 35%
471,000+ 39.6%

New tax rates

0 - 90,000 12%
90,000 - 260,000 25%
260,000 - 1,000,000 35%
1,000,000 39.6%



1) everybody will benefit from lower tax rates on their first 90k, then on their next 170,000k too and on and on, and these tax benefits won't be absorbed by phase outs and the AMT as they have been previously

2) marginal tax rates are lower for everybody across the boards no matter their income level, except for 1,000,000 +

 

[Willie99]

From what I've seen so far, this tax plan isn't really tickling my funny bone. It's still very deduction-heavy and looks like a dimocrap-lite plan to be. Why? Why the fuck do we keep going down this road? Sorry, Donald...you've done a lot of good since taking office. But you can do a lot better here.

This is not a fundamental restructure of the tax code, they are simply moving puzzle pieces to different locations. And guess what? Those pieces can easily be moved right back to where they are now if the dimocraps ever return to power.

Why not burn the whole fucking thing to the ground and move to a flat tax? 15% for everyone and be done with it. Guess what else that does? It means if dimocraps ever did come back into power, they'd need to start from square one if they wanted to rebuild the currently convoluted and fucked tax structure we have today. That would take a generation, at the very least...and it'd be a very difficult road for them.

I'm not saying this plan is all bad, there are some positive things in it. However, if you don't like today's tax code, dims and RINOs could return us right where we are now within a matter of minutes if they ever take the reigns again, if not lead us to an even more oppressive place. Don't fool yourself into thinking they won't.

Oh, btw...where is the elimination of health insurance as a mandatory purchase?

impossible to pass that plan

you can see all the special interests already complaining and people from states that will lose "deductions" not supporting the bill despite the fact that their residents will still receive tax cuts overall

it's why I always laugh when people say I'm going to lose a lot of business. Right, wrong or indifferent, I'm just not concerned about that, it's not happening

 

[Willie99]

My calculation, average family of 4, using round numbers


Income 80,000
Standard deduction 12,000
Exemptions 16,000

Taxable 52,000

Tax 6,850
Credits 2,000

Net tax 4,850

-----------------------


Income 80,000
Standard deduction 24,000
Exemptions 0

Taxable 56,000

Tax 6,720
Credits 3,200

Net tax 3,520

Savings of $ 1,330

The higher your income, the more you'll save

 

[Willie99]

Where I expect changes / negotiations

I expect the state and local tax deduction to be restored or the threshold increased

I expect some sort of personal exemption deduction or credit to increase the tax savings to the average family I calculated above

 

[Willie99]

Spin I'm hearing that's just wrong, getting rid of the AMT will be a tax benefit for wealthy people like Trump. The highest income people don't pay AMT, which was the original intent of AMT. It's now the upper middle class that pays that tax, in large part because the higher income individuals pay a marginal income tax at rates significantly higher than the AMT rates, so they're actually above the AMT

Ask any tax professional that knows his trade, they'll tell you the AMT is not impacting the taxpayers it was designed to impact back in 1970. It's an outdated law

 

[JDeuce]

impossible to pass that plan

you can see all the special interests already complaining and people from states that will lose "deductions" not supporting the bill despite the fact that their residents will still receive tax cuts overall

it's why I always laugh when people say I'm going to lose a lot of business. Right, wrong or indifferent, I'm just not concerned about that, it's not happening

No, it isn’t possible under the current structure. And that’s a sad statement when R’s control every branch of government.

But after dimocraps breathe their death rattle next year, and the RINOs are removed, we will see what happens.

Like I said, this isn’t a catastrophically bad plan. I just hope this is merely the beginning of major reform.

Btw, two words for all the complaining special interests: fuck em.

 

[bodyforlife]

the proposed plan limits that deduction to 10K, after initially proposing to eliminate such. I think they either restore the deduction or increase the threshold before the dust settles. As I stated yesterday, lawmakers will not eliminate popular widely used deductions.

So from what I've read, the $10k limitation is simply on real estate taxes (line 6). Line 5 is completely eliminated.

I also noticed that they eliminated the student loan interest deduction (line 33 of the 1040)

I have not seen anything on the $3000 limitation on capital losses (hopefully they are keeping that in place)

In addition, they are eliminating the personal exemption.

Realizing this is just a proposal and there can be changes, I just ran the numbers from last year's return and my family will indeed pay more (approximately $1200). Admittedly, we're getting off easy compared to many people that purchased their homes much later than us. The hit to them will be more substantial, as many of them do exceed the $10k limitation on property tax (their itemized deductions are much more than ours). For some, the $24k standard deduction might sound great, but it's really more like $16k because you don't get the personal exemption.

Of even greater interest to me is what they do with capital gains on sale of property and 1031 exchanges (which we are about to do). Yes Willie, I'll let the dust settle also. But based on their proposal, I'll stand by my original post. The Middle Class in high COL areas are indeed going to be screwed by this plan (and unfortunately, most people don't realize what it takes to live in areas like these...only looking at things through the optics of their lower cost area). And an $80k family income ain't gonna do it.

 

[Willie99]

I used 80K because that's the average income and I was trying to represent the "average" family. CT is one of the highest income states, and most of my families make far more than 80k as well.

If you live in a high tax state, that is liberal states like CA, CT, NY, NJ, MA and MD, you stand to lose a significant deduction for state and local taxes paid. I can almost guarantee you that part of this bill is going to change, they'll be too much opposition to it in both the house and the senate

Most people will still benefit from the significantly lower tax rates across the boards up to significant income levels. There's only one tax bracket that seems disproportionate for married couples, and that's the 25% bracket only going to
$ 260,000, but that is consistent with the existing structure.

They haven't addressed capital gains, I assume they remain unchanged at this point. Ditto for 1031's

Is the property you're disposing your residence? If yes, I'm sure you're aware you can exclude up to $ 500,000 of "gain" without doing a 1031

If you're doing a 1031, there are very strict rules that have to be followed exactly to preserve your tax deferred status.

You cannot take the proceeds from you sale, they must go to a qualified intermediary and you must close on a new property within six months, so make sure you're getting proper advice

 

[bodyforlife]

I used 80K because that's the average income and I was trying to represent the "average" family. CT is one of the highest income states, and most of my families make far more than 80k as well.

If you live in a high tax state, that is liberal states like CA, CT, NY, NJ, MA and MD, you stand to lose a significant deduction for state and local taxes paid. I can almost guarantee you that part of this bill is going to change, they'll be too much opposition to it in both the house and the senate

Most people will still benefit from the significantly lower tax rates across the boards up to significant income levels. There's only one tax bracket that seems disproportionate for married couples, and that's the 25% bracket only going to
$ 260,000, but that is consistent with the existing structure.

They haven't addressed capital gains, I assume they remain unchanged at this point. Ditto for 1031's

Is the property you're disposing your residence? If yes, I'm sure you're aware you can exclude up to $ 500,000 of "gain" without doing a 1031

If you're doing a 1031, there are very strict rules that have to be followed exactly to preserve your tax deferred status.

You cannot take the proceeds from you sale, they must go to a qualified intermediary and you must close on a new property within six months, so make sure you're getting proper advice

No, we'll be renting out our principal residence in Daly City (should get great cash flow and have no intention of selling). We have an investment property in Salt Lake City that we plan on selling and picking up a property in Austin once we decide we like it there. I was thinking we had to do the exchange in 45 days. That's good to know that we have 6 months. Thanks for the info on that.

 

[bodyforlife]

Check your email

 

[Willie99]

No, we'll be renting out our principal residence in Daly City (should get great cash flow and have no intention of selling). We have an investment property in Salt Lake City that we plan on selling and picking up a property in Austin once we decide we like it there. I was thinking we had to do the exchange in 45 days. That's good to know that we have 6 months. Thanks for the info on that.

must identify replacement property within 45 days of closing, but you have 180 days to actually close on the replacement property

 

[bodyforlife]

must identify replacement property within 45 days of closing, but you have 180 days to actually close on the replacement property

Got it, thanks.

 

[Willie99]

I'm not a fan of the plan in it's existing form, but I think it's going to change

1) it's not tax simplification, save for some lower income taxpayers

2) in their effort to create simplification for somebody and cut taxes, they wind up with tax increases for some middle income Americans (tax cuts for most)

3) I don't think they should raise taxes on any middle income Americans

4) I believe they should give a bigger tax cut to lower income individuals, and I would restore the tax deductions as an itemized deduction and increase the mortgage interest deduction to some limit > $ 500,000, and I would offset all of that by increasing taxes by 1% starting somewhere around $ 250,000

5) I believe by eliminating the AMT, the people earning $ 250,000 plus will still receive significant tax breaks

6) I believe more money will be spent spurring economic growth by giving greater tax cuts to people earning < $ 250,000

7) I also believe in maintaining the significant tax cuts for businesses, this too will spur economic growth

 

[Dave007inVegas]

No, it isn’t possible under the current structure. And that’s a sad statement when R’s control every branch of government.

But after dimocraps breathe their death rattle next year, and the RINOs are removed, we will see what happens.

Like I said, this isn’t a catastrophically bad plan. I just hope this is merely the beginning of major reform.

Btw, two words for all the complaining special interests: fuck em.

That is the most important part. Once that happens we will see real progress.
They are the real enemy.

 

[Willie99]

So the Senate passes their own bill, and it's different, and you know more changes are coming, and now maybe people can appreciate why I really don't take any of this stuff seriously until a bill actually becomes law

Also, does anyone want to suggest my business is going to decline? I always found that stuff funny, it never happens and it can never happen, too many hands in the pot (and I'm not talking about accountants)

 

[Dave007inVegas]

So the Senate passes their own bill, and it's different, and you know more changes are coming, and now maybe people can appreciate why I really don't take any of this stuff seriously until a bill actually becomes law

Also, does anyone want to suggest my business is going to decline? I always found that stuff funny, it never happens and it can never happen, too many hands in the pot (and I'm not talking about accountants)

I think your business will be just fine. When I saw Ryan hold up that
post card and say people will be able to file their taxes on it I burst
out laughing. I suspect this will be another legislative boondoggle.

I thought the purpose of this endeavor was to cuts taxes. Silly me.
If you want to cut taxes just lower the rates and be done with it.
Why the kabuki circus? Is it job security?

 

[Willie99]

I think your business will be just fine. When I saw Ryan hold up that
post card and say people will be able to file their taxes on it I burst
out laughing. I suspect this will be another legislative boondoggle.

I thought the purpose of this endeavor was to cuts taxes. Silly me.
If you want to cut taxes just lower the rates and be done with it.
Why the kabuki circus? Is it job security?

I don't know Dave, they need at least one person like me in the house

It wouldn't be very hard for me to structure the tax cuts to please everyone, or I should say to accomplish their stated objectives

A tweak here and a tweak there and baddafuckingbing, mission accomplished. I'm sure they're talking to accountants, but it must be big picture or theoretical people, they need somebody who understands the code through actual practice, and I can only surmise that's missing. Because they really are acting like a bunch of stupid fucks.

What concerns me most about the current state of affairs is that some idiot Republicans are actually trying to justify increasing taxes on the upper middle class in high tax states by saying "the federal government as subsidized those states long enough".

1) it's not really true and 2) it's political suicide

Every lower and middle income family has to pay less tax, not more, with maybe very few exceptions

 

[Dave007inVegas]

I don't know Dave, they need at least one person like me in the house

It wouldn't be very hard for me to structure the tax cuts to please everyone, or I should say to accomplish their stated objectives

A tweak here and a tweak there and baddafuckingbing, mission accomplished. I'm sure they're talking to accountants, but it must be big picture or theoretical people, they need somebody who understands the code through actual practice, and I can only surmise that's missing. Because they really are acting like a bunch of stupid fucks.

What concerns me most about the current state of affairs is that some idiot Republicans are actually trying to justify increasing taxes on the upper middle class in high tax states by saying "the federal government as subsidized those states long enough".

1) it's not really true and 2) it's political suicide

Every lower and middle income family has to pay less tax, not more, with maybe very few exceptions

A tweak here and a tweak there. Like maybe if you now pay 35% you now pay 20%.
If you now pay 30% you now pay 15% etc? Am I simplifying it to much?