Tax increase under new tax bill; check yours

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Contrary to the media's detailed charts, tables, etc. portraying that most American will get a tax cut, here is what I find that many families are facing a tax increase, substantially. If your are in 20% or 25% brackets, with kids older than 17 years old but still your dependents (so the increase of child tax credit and phase-out limit don't apply), and your itemize beyond $24000, your tax will increase big time. Why?

1. Child tax credit increase not for you;
2. SALT (state and local tax) deduction limited to 10K;
3. Nasty repeal of personal exemptions (4050 per person), for a family of 5, that's $20,250

So your taxable income is going to increase by the amount in 3) and the amount that you can not deduce in 2), the 3% lower tax rate only dent that little bit. In my scenario, my tax will increase by more than $2500.

For families with income earners in their 50's, with > 17yo kids, and pay higher SALT. There are many.
 
If you're somewhere with high income and high costs of living like NYC or California the new tax bill is likely to do you few favors.
 
Most Americans will get a decent tax cut and get to keep more of what they earned. Moderately higher income? No. High tax state? Not so much. But why anybody concerned about high taxes would live in a high tax state is beyond me.
No...it's not an ideal tax break for everybody, but it's better than we've had in a very long time. Corporations are already reinvesting, and that's a great thing.

All in all, I'll take it and smile. Things are improving all the time.
 
Originally Posted By: kschachn
This is a great choice when you’re making a post that will surely get the thread locked.


Why their discussing tax law not politics?
 
Originally Posted By: JohnnyJohnson
Originally Posted By: kschachn
This is a great choice when you’re making a post that will surely get the thread locked.


Why their discussing tax law not politics?



precisely
 
After WWII and the USA and other counties won, people were thinking less of what's in it for me in my paycheck, but what we can do as a whole. That's why under Ike it was 91% for the top brackets and we invented and built most of what we enjoy today, including even freeways. "I like Ike" my grandmother used to say. They had a business and paid their taxes. The days of me are here.
 
Looks like mine will go down. So I'm ok with the bill.
wink.gif
Honestly, I was expecting it to go up, Murphy's Law and all.

What I can't find out is if my 401k contribution is pre-tax or not. Along with medical expenses. I'd like to do my budgeting for next year.
 
Interestingly, the SALT deduction limit of 10K, same amount applies to singles and to joint filers. I wonder if married file separately is better than file jointly for said family in my OP...... numbers games.
 
401K is pre-tax, which lowers your taxable income. Max it out if you can.

Originally Posted By: supton
Looks like mine will go down. So I'm ok with the bill.
wink.gif
Honestly, I was expecting it to go up, Murphy's Law and all.

What I can't find out is if my 401k contribution is pre-tax or not. Along with medical expenses. I'd like to do my budgeting for next year.
 
I am old enough to realize that with every tax cut my taxes have increased and with every tax increase they have increased. Maybe more people should be aware of the cost of the government they serve.
 
Originally Posted By: windeye
401K is pre-tax, which lowers your taxable income. Max it out if you can.

Originally Posted By: supton
Looks like mine will go down. So I'm ok with the bill.
wink.gif
Honestly, I was expecting it to go up, Murphy's Law and all.

What I can't find out is if my 401k contribution is pre-tax or not. Along with medical expenses. I'd like to do my budgeting for next year.


I plan to increase it this year--but I want to make sure it's deductible, along with medical. In the end I have to make my budget work, and I need to figure out what tax withholdings I want from each pay check.
 
Your 401K contribution is not even included in your W2 salary, box 1, from which you report your income. The contribution is on box 12 (12D?). so no need to deduct anything for 401K contribution, it's already done on W2.

Originally Posted By: supton
Originally Posted By: windeye
401K is pre-tax, which lowers your taxable income. Max it out if you can.

Originally Posted By: supton
Looks like mine will go down. So I'm ok with the bill.
wink.gif
Honestly, I was expecting it to go up, Murphy's Law and all.

What I can't find out is if my 401k contribution is pre-tax or not. Along with medical expenses. I'd like to do my budgeting for next year.


I plan to increase it this year--but I want to make sure it's deductible, along with medical. In the end I have to make my budget work, and I need to figure out what tax withholdings I want from each pay check.
 
Ditto, brother!
Originally Posted By: CT8
I am old enough to realize that with every tax cut my taxes have increased and with every tax increase they have increased. Maybe more people should be aware of the cost of the government they serve.
 
Originally Posted By: CT8
I am old enough to realize that with every tax cut my taxes have increased and with every tax increase they have increased. Maybe more people should be aware of the cost of the government they serve.

What does the calculator say re: your 2018 taxes?
 
Originally Posted By: supton
Originally Posted By: windeye
401K is pre-tax, which lowers your taxable income. Max it out if you can.

Originally Posted By: supton
Looks like mine will go down. So I'm ok with the bill.
wink.gif
Honestly, I was expecting it to go up, Murphy's Law and all.

What I can't find out is if my 401k contribution is pre-tax or not. Along with medical expenses. I'd like to do my budgeting for next year.


I plan to increase it this year--but I want to make sure it's deductible, along with medical. In the end I have to make my budget work, and I need to figure out what tax withholdings I want from each pay check.

Your 401k is deferred; that income doesn’t show up on your W-2 as taxable income. The limit for 2018 is $18,500.

Medical expenses are deductible when they exceed 7.5% of your AGI. That’s a substantial amount of medical costs you’ll have to pay out of pocket before they’re deductible, so take that into consideration.
 
Massive increase in high cost of living area and if you own a home. I'm totally aware of it early on that it is not a tax cut for most people in our area.

I'd try not to make it political but usually politicians will never make their campaign contributors' tax increase, and usually pick their opponents' support base to increase tax on to pay for their own support base's tax cut. This is the universal truth in politics.
 
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