Find your new tax brackets under the final tax plan

[burrocrat]

if you like your tax plan, you can keep your tax plan.

 

[RazorCat]

This is one of those times where I look at how it affects me directly. Hell, I got a 2% raise this year, and it appears a 3% cut in my taxes. That's a noticeable raise in pay.
I'll take what I can get after spending my last 3 working years without a raise or a recognizable tax cut.
Guess I'll find out in February.

 

[MrBowl]

Watch out for that ‘doubling of standard deduction’ part....it does double, but the personal exemption goes away, as previously noted. Net result, standard deduction is only slightly higher than before (or even less, depending on what you had as personal exemptions before. All gone now.)

I'm not sure on the amounts of these aspects so I guess we'll see. With a wife and one child I could also be helped by an increase in the child tax credit?

bottom line...I'll get on my 2017 taxes fairly early after the near year, but I don't think I'll notice a whole lot of difference from this bill until 13 months from now when I do my 2018 taxes. In the meantime I might have to adjust my withholding amount early in 2018 to keep it somewhere near the 2017 levels. I really can't financially handle a surprise April 15 bill instead of a refund.

 

[RazorCat]

To be honest I have been following the tax plan kind of on the fringe since I have no control over what happens. But, doesn't some of these deductions disappear by 2020?

A couple of things I heard today on MSNBC is individual rates expire in 2026.
And the maximum allowed for mortgage interest deductions were raised to $750,000.00 (from 500k initially).
Both of these were compromises inserted in the final bill.
Just what they stated.

 

[uscfanhawaii]

I'm not sure on the amounts of these aspects so I guess we'll see. With a wife and one child I could also be helped by an increase in the child tax credit?

bottom line...I'll get on my 2017 taxes fairly early after the near year, but I don't think I'll notice a whole lot of difference from this bill until 13 months from now when I do my 2018 taxes. In the meantime I might have to adjust my withholding amount early in 2018 to keep it somewhere near the 2017 levels. I really can't financially handle a surprise April 15 bill instead of a refund.

What the GOP isn't telling you about the new tax bill

Although the title sounds a bit political, this is actually a pretty objective look at the plusses and minuses of the tax bill.

In regards to your question of the higher standard deduction, vs loss of personal exemption, vs higher child credit, it says:

"Allowing all taxpayers to deduct another $6,000 or more from their tax bills (due to higher standard deduction) could prove very costly to the government’s budget. To offset the lost revenue the bill makes a series of other changes to the code. It eliminates another perk known as the “personal exemption,” which allows taxpayers to deduct $4,150 for themselves and each qualifying child. Then because eliminating the personal exemption could hurt families, the bill also refines another facet of the code, doubling the child tax credit to $2,000 from $1,000 and dramatically raising the income caps to allow more people to benefit from it."

You can use that to figure out your own situation.

 

[evilanne]

What the GOP isn't telling you about the new tax bill

Although the title sounds a bit political, this is actually a pretty objective look at the plusses and minuses of the tax bill.

In regards to your question of the higher standard deduction, vs loss of personal exemption, vs higher child credit, it says:

"Allowing all taxpayers to deduct another $6,000 or more from their tax bills (due to higher standard deduction) could prove very costly to the government’s budget. To offset the lost revenue the bill makes a series of other changes to the code. It eliminates another perk known as the “personal exemption,” which allows taxpayers to deduct $4,150 for themselves and each qualifying child. Then because eliminating the personal exemption could hurt families, the bill also refines another facet of the code, doubling the child tax credit to $2,000 from $1,000 and dramatically raising the income caps to allow more people to benefit from it."

You can use that to figure out your own situation.

I don't see how this will be helpful to single parents with more than one child. They don't address head of household status but my guess would be standard deduction would be $18K (1.5 X single). Current Exemption $4050 per dependent up to $1000 Child Tax Credit. For each additional child in future years, you get $1000 more but lose $4K exemption resulting in net loss of $3K per child as far as deductions go. Standard Deduction is only slightly more beneficial to HoH with one child. Child Tax Credit is only applicable under age 17, when they tend to get more expensive based on my experience. Although the lower tax rates should offset difference in most cases, it looks like children will be less beneficial as tax deductions in the future.

 

[nasa1974]

What will be all telling is if we come back a year from now as we start to do our 2018 taxes (or wait to early 2019) and see who are the winners and losers. I'm in!!!
We will have to think of some parameters to use so we are all on the same playing field for comparison.

Some examples;
Family size
Property taxes
Income range
Did you itemize or take the standard deduction

What do you think?

 

[uscfanhawaii]

What will be all telling is if we come back a year from now as we start to do our 2018 taxes (or wait to early 2019) and see who are the winners and losers. I'm in!!!
We will have to think of some parameters to use so we are all on the same playing field for comparison.

Some examples;
Family size
Property taxes
Income range
Did you itemize or take the standard deduction

What do you think?

OR......Could we do our 2017 taxes the current way, and then redo them with the new rules?
That may (or may NOT) be too cumbersome.

 

[RazorCat]

OR......Could we do our 2017 taxes the current way, and then redo them with the new rules?
That may (or may NOT) be too cumbersome.

The family financial guru took our 2016 information, and estimated (not off by much if any) 2017 income, and plugged it in using what we know so far about the new tax rates. The only change next year is she’s retiring. But, we’re replacing her income dollar for dollar from investments and savings for the first year, so it shouldn’t make a difference. 22% bracket, no kids, short form, no mortgage, under $10,000 in state and local tax. We come out about $1900.00 ahead.
Stay tuned and we’ll see how close she came to being accurate.

 

[evilanne]

What will be all telling is if we come back a year from now as we start to do our 2018 taxes (or wait to early 2019) and see who are the winners and losers. I'm in!!!
We will have to think of some parameters to use so we are all on the same playing field for comparison.

Some examples;
Family size
Property taxes
Income range
Did you itemize or take the standard deduction

What do you think?

OR......Could we do our 2017 taxes the current way, and then redo them with the new rules?
That may (or may NOT) be too cumbersome.

We can do both. I update my estimate with each proposal. Base on what I know now, the new tax proposal would only save me a few hundred $$$, maybe a little more with reduced rate for a few thousand dollars in dividends & capital gains.

I already have tax software to try and figure out if I need to submit a check in January to avoid any underpayment penalty since I did conversion earlier this year. I think I'm ok but still looking for more deductions and hope the proposed threshold from 10% to 7.5% for medical got into the final bill for 2017. Filing status is single with ~$14K in itemized deductions.

 

[alevin]

You still have time to do a few more charitable deductions. That is what I am finding myself doing, due to a couple miscalculations earlier this year.

 

[Boghie]

Well, since the 'sturm and drang' is done with, I have just compared the tax liability for 2018 to that of 2016 (the one I have the best data on). That is, I used the numbers from 2016 in calculating the Federal income tax liability for both years.

Drum roll please...

More drums, better percussion, a little more base!!!

I want to hear the thunder, I want to see the lightning. I want the fire and brimstone.

Instead, my Federal income tax liability dropped by $2,435/year, or $93/pay period. Oh, the humanity. What am I to do!!!

 

[RazorCat]

Well, the retirement checks certainly got noticeably bigger in February. My wife’s check got a bump too. I’ll take it for now, and enjoy the extra $$$.
Looking forward to seeing how others in different situations and locations fare under the new tax laws.

 

[chpwolf]

I stumbled across this Friday. I didn't reply yet as I had an appointment with my tax pro yesterday.
This is my experience, comparing 2017 --> 2018.
After filing 2017, my TP estimated my current settings would put my refund at about double ($2300 - $4500, roughly).
My employer, in January, 2017, started taking less out, which added about $100 per PP back into each check.
I have a rental house that varies greatly from one year to next on income vs. repairs, so it's hard to do estimates because I never know if tenants will pay rent or if I need to repair/replace things.
Generally, it's been an average loss of about $1950. (2 gaining years since 2012, once for $10, and once for $122).
2017 - $122 gain.
2018 - $4060 loss.

My return this year is $2604. Remember, though, that I had about $2400 in more pay throughout the year, so compared to last year and their estimate, it was low. However, they didn't predict a $4060 loss on the rental.
If I plug in the $2400 into my pay, and use 2017's rental amounts (e.g. it did just as good as the year before example), then my return would have been $4087. My income increased $9K.
So, income up $9K, rental the same, I would have had about 1.8X more on my return, give or take.

Per TP paperwork:
2017:
Marginal tax bracket: 25%
Effective tax bracket: 11%

2018:
Marginal tax bracket: 22%
Effective tax bracket: 11%

So, I'm still in the effective 11%, but my marginal has dropped down a bracket. Overall, I'm pretty convinced with my numbers that the changes put into effect this year were a positive impact on my family/budget.

Oddly enough, next year, I'm predicting a first time ever 4 figure gain on the rental (about $3.2K, maybe).
If all else remained about the same, that would drop my current return down to about $1,018, with approximately $7200 increased rental income from this year's.

At any rate, thought I'd toss up some numbers for others to compare against. I make no apologies for not having fancy/neat tables. My text is about as accurate as my thoughts, jumbled and all over the place at once.

 

[chpwolf]

Forgot to add:
2017, I itemized and my standard deduction + exemptions was $30K.
2018, I took standard $24K deduction and (there are) no exemptions.