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  1. #1
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    New federal tax law change question

    So when the fed's changed the tax law for 2018 and forward, I did some basic calculations and figured we would be big winners. However my friend is telling me that he will pay be paying about $4K ~ $6K more this year. He's a realtor, single with no dependents and lives and works in MO. I don't know exactly how much he makes but he said he had a big year last year and is having a better year this year. If I had to guess, probably $75K ~ $125K per year. He complains he cannot deduct like before. While I know that is true, my understanding is between the increase in the personal deduction and lower marginal rates, that should offset that and then some. I'am pretty certain the $10K max deduction for state & property tax is not a factor and from what I remember pretty much every income level should be a winner and it was more so if you have dependents and/or the higher your income is. I told him I think he may be mistaken and should also look into changing to a business - from what I read it helps. So, knowing that we have realtors on here and many business owners, thought I would get some true life information.

  2. #2
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    I believe for most people they will pay less in taxes especially those who didn't itemize. If you were a big "itemizer" if that's a word, no kids, or live in high personal property/ home interest cost / real estate tax etc states it may hurt you come April.

    I read where they expect itemized tax returns to drop from 30% to 6% of returns sent in. Basically the doubling of the standard deduction and the removal of "unreimbursed business expense" will force most people to file a standard return.

    It will be interesting to see if the charitable gift giving decreases when less are claiming it on their returns and I believe the removal of gift giving or donation to XYZ in exchange for level
    Of sports tickets has also been removed.
    Live, Love, & Laugh

  3. #3
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    I'm really wondering how its all going shake out at tax time.
    I have itemized for the last 29 years. With the new higher standard deduction, that will no longer be the case.
    I do know that about 25% less fed tax was being taken out of my checks. Just in case, I changed from Married 2 to Married 0.

  4. #4
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    So are you saying I'll be continuing to get punished come tax time for not having kids?

  5. #5
    Join Date
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    Quote Originally Posted by ya never know View Post
    I believe for most people they will pay less in taxes especially those who didn't itemize. If you were a big "itemizer" if that's a word, no kids, or live in high personal property/ home interest cost / real estate tax etc states it may hurt you come April.

    I read where they expect itemized tax returns to drop from 30% to 6% of returns sent in. Basically the doubling of the standard deduction and the removal of "unreimbursed business expense" will force most people to file a standard return.

    It will be interesting to see if the charitable gift giving decreases when less are claiming it on their returns and I believe the removal of gift giving or donation to XYZ in exchange for level
    Of sports tickets has also been removed.
    I've had my tickets for Kansas State football for 20 years as of this year....and have never minded the "required donation" until the last couple years. I haven't been able/wanted to go to a game in 2-3 seasons due to kids activities, house work, work, etc...

    Now that the donation is no longer deductible, it's gonna get a lot easier to give up those tickets. We shall see. I've always been able to sell them and recoup most of my cost...but not having a lot of luck this year. I'm starting to see that money as being spent better elsewhere, and I've gotten to the point I prefer watching on TV anyway.

  6. #6
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    Quote Originally Posted by SNSTER View Post
    So are you saying I'll be continuing to get punished come tax time for not having kids?
    I've never understood why people who chose to have kids get more money back than people who chose not to have kids.

  7. #7
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    Quote Originally Posted by SNSTER View Post
    So are you saying I'll be continuing to get punished come tax time for not having kids?
    Probably not since they eliminated the personal exemptions, but increased the standard deduction.

    We're retired on fixed income and we will be paying more this year. All due to the fact that the increased standard deduction amount is less than what the personal exemption plus the itemized deductions were combined.

    One of the potential gotcha's is with the elimination of the personal exemptions the your state AGI could increase. Increasing the state income tax payable.
    What happens at the lake, stays at the lake. Unless I have a camera handy.

  8. #8
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    The high standard deduction really kicks people with mortgage interest. You have to pay a lot in mortgage interest to be more than the standard deduction. Or have a lot of other deductions, but as the OP pointed out, there aren't as many anymore.

    Which means your mortgage interest is basically no longer tax deductible. No longer are you borrowing that 4% mortgage money at an effective 3%.

  9. #9
    Join Date
    Jan 2005
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    Approximate savings of $2500 for us ...... The new standard Deduction is good for people that do not have a lot of mortgage interest to deduct, or in that matter anything to deduct --- Thank You President Trump for this, as well as the higher markets from the Obama years ..... Now get this Medical Insurance crap fixed and lower premiums ...... To Risky being selfpay
    Life is gooder in retirement !!!! - Endless Summer Live Life !!!

  10. #10
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    Quote Originally Posted by Lakerat View Post
    Approximate savings of $2500 for us ...... The new standard Deduction is good for people that do not have a lot of mortgage interest to deduct, or in that matter anything to deduct --- Thank You President Trump for this, as well as the higher markets from the Obama years ..... Now get this Medical Insurance crap fixed and lower premiums ...... To Risky being selfpay
    I’m gonna get screwed. So much for helping the middle class. But then again thank you Obama for the higher markets from the Bush years.

  11. #11
    Join Date
    Jul 2005
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    Start looking now at the loop holes, spend the rest of the year setting up how to make the best of what is available, but more importantly what is not listed as being removed. If you don't make changes, you may have less of an advantage. By starting now, maybe not the first year, but definitely by the second we should have all the strategies figured out. If you have a "paycheck" look at the deductions and see what /how it is effecting your check. It is designed to give you more money to use now. The real answer will be when filing next year.

    We all went through this in the '86 changes. Set up companies, trusts etc to protect the income. Realize the people that set up all the changes are business people. I doubt very much they are/have stopped looking out for their interests first.

    The middle class is who will benefit most from these changes the first year. These are for the most part people who punch a clock and have real paychecks. Those of us that have revolving incomes etc, just need to look at everything and begin working the strategies. Much like we do everyday, when you own your own business....
    B&B
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  12. #12
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    Quote Originally Posted by RMDye View Post
    Probably not since they eliminated the personal exemptions, but increased the standard deduction.
    The child tax credit doubled from $1,000 per child to $2,000 per child. Additionally, the phase out was significantly increased so many more taxpayers will benefit.

  13. #13
    Join Date
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    Quote Originally Posted by boater34 View Post
    So when the fed's changed the tax law for 2018 and forward, I did some basic calculations and figured we would be big winners. However my neighbor is telling me that he will pay be paying about $4K ~ $6K more this year. He's a realtor, single with no dependents and lives and works in MO. I don't know exactly how much he makes but he said he had a big year last year and is having a better year this year. If I had to guess, probably $75K ~ $125K per year. He complains he cannot deduct like before. While I know that is true, my understanding is between the increase in the personal deduction and lower marginal rates, that should offset that and then some. I'am pretty certain the $10K max deduction for state & property tax is not a factor and from what I remember pretty much every income level should be a winner and it was more so if you have dependents and/or the higher your income is. I told him I think he may be mistaken and should also look into changing to a business - from what I read it helps. So, knowing that we have realtors on here and many business owners, thought I would get some true life information.
    He must be an employee of the real estate agency. Unreimbursed employee business expenses are no longer deductible so I assume he has expenses that are not reimbursed by his employer and can no longer deduct them personally. With a little bit of planning, this can be easily avoidable. I would highly recommend that he speaks to a tax adviser now.

    Just about all of our clients will see a reduction in their income. The only group that is getting hit are professional athletes. They will see their tax liabilities increase significantly under the new laws.

  14. #14
    Join Date
    Jul 2006
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    Olathe Ks./Sunrise Beach, Mo.
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    Mariah 302Z
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    Um uh Moderator … Its 90 degrees daily, I've got two boats full of gas & these guys are bitching about filing taxes next year! Can we save that discussion for October? (I already changed my withholding in April)

  15. #15
    Join Date
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    There will be a learning curve for business owners. I thought it was going to be helpful, but now I am not sure. There are fairly pedestrian income limits to benefit from the qualified business income deduction. After that the deduction is subject to the wage/investment limit. Now that Kansas is over taxing business owners, I will lose some of that deduction also. Time will tell....
    Don Dusselier
    10 MM LOTO

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