Your tax burden. :)

[Circlejoe]

We're going to see a lot of changes to this proposed bill by the time it moves through the Senate. The final bill will be ugly because they will need to accommodate certain senators to get their vote, and every change will have an impact on the 1.5 trillion cap. We'll end up with a real mess, if they are able to pass anything at all. I heard a congressman earlier today saying the real battle will be with the lobbyists who are opposed to the proposals. Of course he acted as if he was standing up for America by standing firm against those evil lobbyists when we all know his pockets are lined with the contributions from lobbyists who wrote the proposals that help the people they represent. I wish they would just be transparent. Some taxpayers will win, some will lose. The true question is what will the changes do for our economy and the people who are feeling the most pain. I have a feeling this tax bill will benefit those who contribute most to politicians. Jus' sayin'.

 

[twenty02]

Warning: Wonky

Eight Important Changes in the Tax Cuts and Jobs Act

https://taxfoundation.org/important...al&utm_source=twitter.com&utm_campaign=buffer

 

[IUCrazy2]

Warning: Wonky

Eight Important Changes in the Tax Cuts and Jobs Act

https://taxfoundation.org/important...al&utm_source=twitter.com&utm_campaign=buffer

From what I get out of that, it does not sound too bad. Not a bad starting out point at the least.

 

[crazed_hoosier2]

Warning: Wonky

Eight Important Changes in the Tax Cuts and Jobs Act

https://taxfoundation.org/important...al&utm_source=twitter.com&utm_campaign=buffer

I'm trying to get a grasp on this aspect of the proposed pass-through change:

Therefore, the plan includes a number of anti-abuse rules, beginning with the assumption that 70 percent of pass-through business income is compensation (subject to ordinary rates) while 30 percent is business income (subject to the lower pass-through rate).
​

We typically reinvest everything but roughly what we owe in taxes. I guess it's an improvement to get 30% of K-1 income at the lower rate rather than the current zero. But, still, for companies like mine which do very little in the way of distributions, this is a really bad assumption. Of course, I'm sure it's entirely true for many closely held companies that some significant portion of the pass-through is actually just compensation by a different name. But why wouldn't they just apply this rule to distributions? Why treat those of us who are retaining and reinvesting the same way you'd treat somebody who's just trying to minimize their own payroll taxes?

 

[PurdueTiger]

My wife and I have an annual income of just over $.55.000 in retirement.We are still paying off our mortgage,have a five hundred dollar a month car payment,and owe a small amount in credit cards.I have been retired almost three years,and its been a good time.We have taken three nice trips out of state,and we don't feel like our tax burden is too much.I have never worried a lot about taxes,because we have never lacked for anything we have really needed .Sure,we would all like to pay less in taxes,but I came into this world with no money,and I surely cant take any with me.

 

[crazed_hoosier2]

Warning: Wonky

Eight Important Changes in the Tax Cuts and Jobs Act

https://taxfoundation.org/important...al&utm_source=twitter.com&utm_campaign=buffer

Also, the estate tax...

The estate tax would be repealed. The federal estate tax, which raises very little revenue but encourages significant tax arbitrage and avoidance activity, would be repealed under the plan after six years. The plan immediately increases the exemption to $10 million.
​

I'm convinced that policymakers have no intention of actually ever ending the federal estate tax -- which is why they're proposing to double the exemption immediately, but wait 6 years for elimination. If this were to become law, what that likely would end up meaning is that the higher exemption will stay put and some future Congress will do away with the wholesale elimination.

 

[twenty02]

I'm trying to get a grasp on this aspect of the proposed pass-through change:

Therefore, the plan includes a number of anti-abuse rules, beginning with the assumption that 70 percent of pass-through business income is compensation (subject to ordinary rates) while 30 percent is business income (subject to the lower pass-through rate).
​

We typically reinvest everything but roughly what we owe in taxes. I guess it's an improvement to get 30% of K-1 income at the lower rate rather than the current zero. But, still, for companies like mine which do very little in the way of distributions, this is a really bad assumption. Of course, I'm sure it's entirely true for many closely held companies that some significant portion of the pass-through is actually just compensation by a different name. But why wouldn't they just apply this rule to distributions? Why treat those of us who are retaining and reinvesting the same way you'd treat somebody who's just trying to minimize their own payroll taxes?

Not sure....but I'm guessing this won't be the last say on this issue. Kind of a complicated one for sure. Maybe @stollcpa has some thoughts

 

[twenty02]

Also, the estate tax...

The estate tax would be repealed. The federal estate tax, which raises very little revenue but encourages significant tax arbitrage and avoidance activity, would be repealed under the plan after six years. The plan immediately increases the exemption to $10 million.
​

I'm convinced that policymakers have no intention of actually ever ending the federal estate tax -- which is why they're proposing to double the exemption immediately, but wait 6 years for elimination. If this were to become law, what that likely would end up meaning is that the higher exemption will stay put and some future Congress will do away with the wholesale elimination.

That one is fully expected to die in the Senate, from what I understand. Likely they just raise it to $10m or something and be done with it.

 

[BCCHoosier]

Little clarity....the $10k limit is just for property tax deduction. They are fully eliminating state/local income tax deduction.

It's rather shady....as many large red states (I'm looking at you TX and FL) have no income tax....but very high property tax.

States like CA have low (capped) property tax....but high income tax.

Keeping one while ditching the other is shady. I feel for people who are literally going to be double taxed in those states.

None of this matters to middle class and lower....with a $24k standard deduction they are coming out better off.

When you eliminate the personal and dependency exemption, it is going to be close for many families. The increase in child tax credits will help, but i can see cases of families making between 150-250 per year paying more in taxes. I plan to run the numbers tonight even though this will change. Charities will feel it for sure in the current form.

 

[crazed_hoosier2]

That one is fully expected to die in the Senate, from what I understand. Likely they just raise it to $10m or something and be done with it.

Despite some accusations here to the contrary, I really try to avoid looking at tax policy changes only through a lens of what they would mean for me.....like Russell Long's old quip "Don't tax you, don't tax me....tax that fellow behind the tree."

But I guess I should be happy if the exemption is doubled as that probably releases me from a potential liability. But I still think the estate tax is BS -- particularly when levied against dollars that have already been taxed -- whether I'm below the current exemption threshold or not.

 

[stollcpa]

Not sure....but I'm guessing this won't be the last say on this issue. Kind of a complicated one for sure. Maybe @stollcpa has some thoughts

i

Played golf this afternoon. Have only heard bits and pieces on ride home. Will dig into details tonight and tomorrow. Sounds like the big tax cuts for pass through entities isn’t what we heard. Also it looks like CPAs and Attorneys with pass through entities get no reduction.

 

[twenty02]

Some more obscure (but very relevant) tidbits.

The House Tax Bill: Six Popular Breaks You Didn't Realize You'll Be Losing

https://www.forbes.com/sites/anthon...u-didnt-realize-youll-be-losing/#8e26fa154530

 

[twenty02]

Holy shit. Trump cannot get out of his own way. I can't believe how bad at this job (politics) this guy is. He throws grenades into delicate situations, endlessly.

Key Republican says ObamaCare mandate repeal under consideration in tax bill
​

http://thehill.com/policy/healthcar...are-mandate-repeal-under-consideration-in-tax



If there is one guaranteed way to sink an already tough bill to pass....throwing HC back into it is the way to do it.

(Dirty secret...the House bill isn't that ugly because they really skipped on hard choices that the Senate can't skip on. Comes down to if all this stuff is temporary (10 yr) vs permanent. If they are doing real reform...and making things permanent...none of the numbers from yesterday come close to working)