Ok trying to understand this tax cut stuff but its just left vs right screaming. Is it good or not? From what I can tell its a 3% cut for most people but maybe I’m reading it wrong. My big question is… Do we all get a cut and able to write off stuff like prop tax, insurance, mortgage expenses, child care, depreciation, mileage, ect ect… Most of us probably fall 50K-300K… Do us common folk making under 500K get a break? Also if I own a corporation or LLC is now the time to claim more income to get better lines of credit? Will these tax cuts loosen lending laws so guys like me can expand business and create jobs or buy a Lambo (whichever comes first)
Mix of both, and depends on the individual’s situation.
Depends on your situation. I will likely break even, owe a couple hundred more. My brother and Sister in law will make out pretty well.
Up to 10k, depending on what get’s passed, as an individual.
A business has always been able to, and that doesn’t change. Self employed is a business. For an normal W2 individual, no, but most people get it through caf plans with employers so it is pre tax $.
Depends on your situation lol.
I know these are shitty answers, but the bills I’ve read are neither amazing nor horrid. There is some good and bad in both, and I’m not going to panic either way if it passes or not.
The biggest thing for me is that now my house doesn’t make as much financial sense. I either need to sell and take the money I would spend on interest and invest it, or increase my deductible assets (rentable duplex?)
I’m far from an expert, and obviously come to this with a certain slant. But it seems to me the tax cuts as structured are an unnecessary, debt-exploding sop to the billionaires who finance the GOP.
It never ceases to amaze how the GOP can be such debt/deficit hawks when Dems control the levers of power, then turn into veritable ATM machines when they’re in charge.
Do you mean you can only write off up to 10K in prop tax?
What about mortgage interest? Thats a big one for most folks… That stays right?
There are two bills currently, one in the House and one in the Senate. I don’t think enough is known about either at this point to say definitively how it would impact each person. One of the bills just tacked on a repeal of the ACA mandate.
Im ok with that… It will just speed up single payer. Plus the mandate was a joke. Its easy to offset with more write offs
While I haven’t looked into it much because I think they’re going to have a hard time passing either bill as written, getting rid of the mandate could cause others’ rates to increase considerably. And gutting things like allowing teachers to write off up to $250/year for school supplies they buy themselves doesn’t help their cause (Susan Collins wrote that bill in 2002); it just comes across as cold blooded…
I don’t doubt it but let’s be honest… Within 2-3 months of the new tax code, any smart accountant will find ways to exploit its loopholes…God bless the USA… The only people that suffer are the folks that use HR block or turbo tax. A teacher would just find another write off and double down. It’s the big things I’m worried about for myself. Don’t love the idea Billionaires getting breaks when they pass off assets at death but what do you expect
If the final bill doesn’t grandfather I’d be surprised.
And I’m not strictly opposed to a $500k max. You still get to deduct the interest in proportion. So if you have a million dollar house, you get to deduct half.
It’s to prevent excessive deductions from very rich people. And I’m a proponent of a progressive tax, if we’re going to have taxation.
The house bill limits the deduction of RE taxes to 10k for individuals, rentals would still get 100% deductibility, assuming you get the losses due to passive activity rules etc.
Mortgage interest stays, but is capped at $500k.
I’ve only read the house bill. Senate and final will be different.
I’ve read the house bill. I’m pretty okay with how it will impact people.
For the most part, it’s cuts across the board. I’m in a position where I make enough to be “rich” according to the IRS but decidedly not rich according to reality lol. There are some upper middle class people who won’t see a ton of benefit, and it’s not any sort of drastic “give away to the ultra wealthy”.
That amounts to saving between $25-$35 in tax typically… It’s an above the line deduction.
It’s peanuts. They cut shit like that to get compromise from Dems who can go back to there people and say “see I fought for you, the little guy”. When it can’t even get you a date at the movies anymore.
The house bill puts HR Block out of business, and makes turbo tax less necessary IMO. Most of the country could literally call in your return in <8 mins over the phone using an automated system.
Which was crap anyway as that doesn’t cover how much a teacher ends up spending and also gave administrators and school officials something to tell teachers who needed supplies: “well, you can buy them yourself and then deduct it later.” Of course they’ll still expect the teachers to buy supplies for the kids regardless because God knows a family shouldn’t have to decide between buying a pencil or paying its rent.
But what about lending??? Will this help any? As I understand it most loans work off a 3 to 1 debt ratio…so example…
I want to get a 300K loan so I bump my taxs for 2 yrs to get a avg… I shit out a extra 5-6K per year to feds to hit the number…Then get loan then have accountant file amendment to get it all back. Would I now just be able get loans easier without bumping net income up?
Aside from the fact you shouldn’t be posting the rest of your post to a public forum, lol…
The cuts to RE deductions will likely hurt the RE business, which should loosen lending restrictions as demand should dry up and RE prices tame out a little.
These bills could conceivably mitigate another housing bubble.
Thanks just trying to take advantage of free accounting advice moo ha ha ha
Like I said, there is good and bad in here.
One thing, that straight plugs my anus without lube let alone a kiss first, is the loss of being able to deduct state taxes paid. It absolutely pounds me both personally, and professionally it removes an easy deferral tactic.
I figured it was a nice carrot to dems from high tax states so they could add that deduction back in, get two or three dems votes on the bill and everybody wins.
I mean, come on folks (congress), at least cap it at 50k or something, anything.
That does suck… I pay two state taxs becuase where I live I make income in two seperate states… Can this be offset some how?
You are reffering to income earned in a state not prop tax paid in a state yes?