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Tax Projections
Dec. 28th, 2017 10:05 pmThe 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.
