The Soapbox

BocaHoo91

Joined: 06/03/2005 Posts: 31111
Likes: 52577


You sure about that?


Let's take a family of 4 with $150K of income. Assume they contribute 6% to a 401K and pay $3k per year in pre-tax deductible health care premiums, pay a 5% state tax rate, have a $300K mortgage at 4.5% interest and a $400K property value with 1.5% real estate taxes.

Under current law their estimated taxes would be

Income...............$150,000
401K...................($9,000)
Health Ins............($3,000)
Mtg Interest........($13,500)
R/E Taxes............($6,000)
State taxable Inc..$118,500
State tax deduct...($5,950)
Exemptions..........($16,200)
Fed Taxable Inc....$96,375

They would pay 10% on the first $18,650, or $1,865, 15% on the next $57,250 (from $18,650 to $75,900) or $8,588, and 25% on the final $20,475 (from $75,900 to $96,375) or $5,119. $1,865 + $8,588 + $5,119 = $15,571.

Now let's look at their tax under the new plan. Everything is the same except they lose the state tax deduction and the $16,200 in exemptions. With the loss of the state tax deduction, the other itemized deductions only total $19,500, so they take the new higher standard deduction of $24,000. So here's what their taxes look like:

Income..................$150,000
401K......................($9,000)
Health Ins..............($3,000)
Standard deduct...($24,000)
Fed Taxable Inc....$114,000

The tax calc is simpler. They pay 12% on the first $90K of income or $10,800, and pay 25% on the next $24K of income (from $90K to $114K) or $6K. So under the new plan, their taxes would be $16,800 or $1,228 higher than under the old tax plan. The loss of the 4 exemptions is a killer.

For a family of 2 with everything else the same, the new plan saves them $800. For a family of 3, it's roughly a push. On balance, I'd bet it's a slight increase with some families saving, and some families paying more. The bigger the family and the higher the state income tax, the more likely they are to pay more under the trump plan.

(In response to this post by TomKazanski)

Posted: 11/02/2017 at 7:19PM



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Current Thread:
 
  
The AMT goes away, too? WTF? -- WahooMatt05 11/02/2017 2:39PM
  This is actually a decent bill, im shocked -- TomKazanski 11/02/2017 3:12PM
  The proposal seems to flatten rates a bit. -- hoolstoptheheels 11/02/2017 6:19PM
  Politico has an article on it. -- THECZAR 11/02/2017 7:30PM
  Can you cite the source of that talking point? ** -- Hokie5150 11/02/2017 4:47PM
  Yes ** -- 111Balz 11/02/2017 4:55PM
  Would you please do so, kind Sir? ** -- Hokie5150 11/02/2017 5:05PM
  ROTFLMAO... ** -- Hokie5150 11/03/2017 09:49AM
  Based on the sabre experts sounds more like -- walkthecorner 11/02/2017 3:43PM
  WaPo says 80% of Americans should benefit ** -- Hoo23 11/03/2017 02:01AM
  Blue state actually ** -- SokurHoo83 11/02/2017 5:11PM
  I tend to look past the "fear mongering" posters on -- walkthecorner 11/02/2017 4:15PM
  So this plan is really no different than any other. -- walkthecorner 11/02/2017 4:25PM
  Gawd I hate politicians so MUCH. ** -- walkthecorner 11/02/2017 4:31PM
  To some extent but I still think the big donors -- walkthecorner 11/02/2017 4:48PM
  Ok - take away one of the so-called greatest upsets -- walkthecorner 11/02/2017 5:00PM
  Then I stand corrected. ** -- walkthecorner 11/02/2017 5:17PM
  So like I said to other posters, we then seem -- walkthecorner 11/02/2017 5:27PM
  Very true words. ** -- walkthecorner 11/02/2017 5:32PM
  For people in the 50K-250K in will translate to more -- TomKazanski 11/02/2017 3:57PM
  Exactly. -- HoosGuy 11/03/2017 02:18AM
  Well at least someone “wins.” ** -- walkthecorner 11/02/2017 3:51PM
  Wow. For once I agree with everything you said. ** -- 81_Hokie 11/02/2017 6:08PM
  Yeah, thanks Boca -- HoosGuy 11/02/2017 3:22PM
  Boca, you're wrong on this. Look at my post on the topic. -- Warrior Wahoo Wolverine 11/02/2017 4:18PM
  Family of 4, 150K in income, its not a push ** -- TomKazanski 11/02/2017 5:49PM
  You sure about that? -- BocaHoo91 11/02/2017 7:19PM
  Looks like we have a Trump fan folks. ** -- Hokieesith 11/02/2017 2:55PM
  True. ** -- Hokieesith 11/02/2017 2:54PM
  Forgive me for not trusting them off the bat -- WahooMatt05 11/02/2017 2:49PM

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