Tax Projections
Dec. 28th, 2017 10:05 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
bjarvisThe federal taxes have been restructured in recent legislation. I'm told we won't see any changes in our pay until February or so: my employer uses ADP so I'm presuming those folks are on top of this and working weekends & nights to get the adjustments into their payroll software as quickly as possible.
In my projections, my overall tax will goes up about $1,000.
True, my federal tax will drop about 3%, but the $10k cap on itemized deductions on state income taxes & property tax is a problem. The standard deduction is $12k, 20% higher, but it still leaves me out in the cold. For 2016, my itemized deductions were approximately $18k: $12.6k in Maryland income taxes, $2.4k in property tax (my half... Kent gets the other half) and $2.6k in mortgage interest (again, my half). In short, itemizing my deductions under the caps will limit me to about $12.6k. That means I have to pay state & federal tax on an additional $5.4k, more than offsetting the reduced federal tax rate.
So I get to pay more taxes as though I made an additional $5,400 but without actually having made & enjoyed that $5,400. I am not happy about this.
The midterm elections in 2018 had better have a lot of talk in the campaigns about restoring deductions if anyone wants my vote. I think multi-billionaires can take a small hit to their sudden windfall to help smooth things for the middle class: they'll have had a year to buy their personal jets, island paradises, and hide their assets by then.
In my projections, my overall tax will goes up about $1,000.
True, my federal tax will drop about 3%, but the $10k cap on itemized deductions on state income taxes & property tax is a problem. The standard deduction is $12k, 20% higher, but it still leaves me out in the cold. For 2016, my itemized deductions were approximately $18k: $12.6k in Maryland income taxes, $2.4k in property tax (my half... Kent gets the other half) and $2.6k in mortgage interest (again, my half). In short, itemizing my deductions under the caps will limit me to about $12.6k. That means I have to pay state & federal tax on an additional $5.4k, more than offsetting the reduced federal tax rate.
So I get to pay more taxes as though I made an additional $5,400 but without actually having made & enjoyed that $5,400. I am not happy about this.
The midterm elections in 2018 had better have a lot of talk in the campaigns about restoring deductions if anyone wants my vote. I think multi-billionaires can take a small hit to their sudden windfall to help smooth things for the middle class: they'll have had a year to buy their personal jets, island paradises, and hide their assets by then.
no subject
Date: 2017-12-29 04:39 pm (UTC)We just feel it's too complex for us now that we are married, and I don't want to hurt my peabrain figuring it all out. 2016 was complex enough, with us selling both our Albuquerque house, our PS condo, installing solar panels (paid cash), and various other one time issues.
It's interesting seeing all the gloom and doom sensationalism on Facebook about what 45 has done with this new tax overhaul. We did go ahead and pay the rest of our 2017 property tax yesterday (rather than next April), but I haven't sat down to try to figure out if the new higher standard deductions is going to cover other expenses I used to claim. I never had to deal with 'unreimbursed employment expenses' but I hope I can still do my regular Schudule C for square dance calling.