MD Taxes and SALT

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

I can concur. We were north of $250K. Last year our AMT was $3500. This year we lost $4K in SALT. So no complaints here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

[Anonymous]

There is another thread in this forum with people posting their 2017 vs. 2018 tax rates. It shows an income range even narrower than what PP said. 100K to 200K is where the SALT change really matter. 200K+ are likely break-even to even slightly ahead despite the SALT limitation.

[Anonymous]

for a roughly 200k income,

2017 effective tax rate: 12.3%
2018 effective tax rate 13.2%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

I don't really think so. Sure, it doesn't help that a family with an HHI of $400,000 breaks even, or pays a slightly lower effective tax rate year over year, and a family making $180,000 sees a higher effective tax rate. That's annoying. But what really has people twisted is that the Koch brothers, DeVoss family, and Sheldon Addelsons of the world saw a tax cut in the billions. With a B.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

I don't really think so. Sure, it doesn't help that a family with an HHI of $400,000 breaks even, or pays a slightly lower effective tax rate year over year, and a family making $180,000 sees a higher effective tax rate. That's annoying. But what really has people twisted is that the Koch brothers, DeVoss family, and Sheldon Addelsons of the world saw a tax cut in the billions. With a B.

Either way, it's unfair. The fact that someone making $400K or even $100million is getting a tax break but someone making around $120K with kids gets a tax increase is grossly unfair.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Keep in mind that in 2017 the standard deduction for MFJ was $12K vs 2018 at $24K. So you aren't really losing "$10k" in SALT

Why do people keep forgetting that we also lost the personal exemptions?

True but most people come out ahead with the $2K child credit (a credit and not a deduction which is more powerful at lower incomes).

But my 18 year old dependent does not qualify for the credit...

because the party of family values believes that once you turn 18, that's it, you should be on your own. Something about bootstraps.

I think you lose it at 17...to be precise...I guess you are suppose to be on your own before graduating from high school.

Seriously! I don't get a tax credit for my 17-year old junior in high school. So the $2000 tax credit did not make up for the lost in exemptions. Plus we lost $2K in itemized deductions due to SALT. Our effective tax rate went up.

If you only lost $2k in deduction it is hard to imagine your tax rate really went up from last year. At that level the reduction in rates and elimination of marriage penalty more than makes up for it. The only other explanation might be that your income went up from last year. I would double check your taxes if you haven't filed.

Here are my numbers (rounded):

2017 [/u]
income: $128.8K
itemized deductions: $27.4K
exemptions: $20.2K
taxable income: $81.2K
tax before credit: $11.6K
child credit: $2K
tax owed: $9.6K
effective tax rate: 7.4%

2018 [u]
income: $133.1K
standard deduction: $24K (would have been $26K itemized if there was no SALT limit)
exemptions: $0K
taxable income: $109.1K
tax before credit: $15.6K
child credit: $4.5K
tax owed: $11.1K
effective Tax Rate: 8.3%

That is bad.

How is a tax rate of 8.3% bad? That seems super low for someone over $100k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

I don't really think so. Sure, it doesn't help that a family with an HHI of $400,000 breaks even, or pays a slightly lower effective tax rate year over year, and a family making $180,000 sees a higher effective tax rate. That's annoying. But what really has people twisted is that the Koch brothers, DeVoss family, and Sheldon Addelsons of the world saw a tax cut in the billions. With a B.

Either way, it's unfair. The fact that someone making $400K or even $100million is getting a tax break but someone making around $120K with kids gets a tax increase is grossly unfair.

TALK to your family and friends who vote for Trump!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

I don't really think so. Sure, it doesn't help that a family with an HHI of $400,000 breaks even, or pays a slightly lower effective tax rate year over year, and a family making $180,000 sees a higher effective tax rate. That's annoying. But what really has people twisted is that the Koch brothers, DeVoss family, and Sheldon Addelsons of the world saw a tax cut in the billions. With a B.

Either way, it's unfair. The fact that someone making $400K or even $100million is getting a tax break but someone making around $120K with kids gets a tax increase is grossly unfair.

TALK to your family and friends who vote for Trump!

PP here.. none of my family members or close friends (some who are R) support Trump. They all think there is something seriously wrong with him.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

I don't really think so. Sure, it doesn't help that a family with an HHI of $400,000 breaks even, or pays a slightly lower effective tax rate year over year, and a family making $180,000 sees a higher effective tax rate. That's annoying. But what really has people twisted is that the Koch brothers, DeVoss family, and Sheldon Addelsons of the world saw a tax cut in the billions. With a B.

Either way, it's unfair. The fact that someone making $400K or even $100million is getting a tax break but someone making around $120K with kids gets a tax increase is grossly unfair.

TALK to your family and friends who vote for Trump!

Most people who make 120K with kids are getting a tax cut (albeit small). You just happen to hit the perfect storm with where you live. Don't generalize your situation to most of the country.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Has anyone found that other changes have balanced out the SALT hit? For instance, we now qualify for the $2,000 child credit and our rate has gone down from 28% to 24%. But I'm feeling really dumb about weighing all the factors.

I'm also regretting not changing our withholding this summer like so many of you smart people advised. Gah!

We came out ahead despite the SALT change.

It depends on your individual circumstances. Our SALT was previously limited by AMT. However, a combination of lower rate, AMT repeal and surprise child credit made our tax rate lower than last year.

This is right. If you make (generally) north of $250,000, you likely had AMT, and the elimination of that, plus the lower rates, probably works to your advantage, even with the SALT limitation (which had previously been limited for you anyway). If you are between $100k and $250k, you're likely screwed.

And this is why people are saying the tax cuts were unfair.

I don't really think so. Sure, it doesn't help that a family with an HHI of $400,000 breaks even, or pays a slightly lower effective tax rate year over year, and a family making $180,000 sees a higher effective tax rate. That's annoying. But what really has people twisted is that the Koch brothers, DeVoss family, and Sheldon Addelsons of the world saw a tax cut in the billions. With a B.

Either way, it's unfair. The fact that someone making $400K or even $100million is getting a tax break but someone making around $120K with kids gets a tax increase is grossly unfair.

TALK to your family and friends who vote for Trump!

Most people who make 120K with kids are getting a tax cut (albeit small). You just happen to hit the perfect storm with where you live. Don't generalize your situation to most of the country.

But why should it matter where you live? Again, it's unfair.

[Anonymous]

Unlike NY, MD is going to run a surplus in tax revenue this year. Im not sure what can be done because this state is pretty much a democrat tax and spend haven.

We are thinking of moving out to Texas or Florida this year (HHI >800k)

https://www.baltimoresun.com/news/maryland/politics/bs-md-tax-hike-20190214-story.html

[Anonymous]

Anonymous wrote:Unlike NY, MD is going to run a surplus in tax revenue this year. Im not sure what can be done because this state is pretty much a democrat tax and spend haven.

We are thinking of moving out to Texas or Florida this year (HHI >800k)

https://www.baltimoresun.com/news/maryland/politics/bs-md-tax-hike-20190214-story.html

Will you move back when these tax cuts, including the elimination of the SALT deduction, expires?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Keep in mind that in 2017 the standard deduction for MFJ was $12K vs 2018 at $24K. So you aren't really losing "$10k" in SALT

Why do people keep forgetting that we also lost the personal exemptions?

True but most people come out ahead with the $2K child credit (a credit and not a deduction which is more powerful at lower incomes).

But my 18 year old dependent does not qualify for the credit...

because the party of family values believes that once you turn 18, that's it, you should be on your own. Something about bootstraps.

I think you lose it at 17...to be precise...I guess you are suppose to be on your own before graduating from high school.

Seriously! I don't get a tax credit for my 17-year old junior in high school. So the $2000 tax credit did not make up for the lost in exemptions. Plus we lost $2K in itemized deductions due to SALT. Our effective tax rate went up.

If you only lost $2k in deduction it is hard to imagine your tax rate really went up from last year. At that level the reduction in rates and elimination of marriage penalty more than makes up for it. The only other explanation might be that your income went up from last year. I would double check your taxes if you haven't filed.

Here are my numbers (rounded):

2017 [/u]
income: $128.8K
itemized deductions: $27.4K
exemptions: $20.2K
taxable income: $81.2K
tax before credit: $11.6K
child credit: $2K
tax owed: $9.6K
effective tax rate: 7.4%

2018 [u]
income: $133.1K
standard deduction: $24K (would have been $26K itemized if there was no SALT limit)
exemptions: $0K
taxable income: $109.1K
tax before credit: $15.6K
child credit: $4.5K
tax owed: $11.1K
effective Tax Rate: 8.3%

That is bad.

How is a tax rate of 8.3% bad? That seems super low for someone over $100k.

+1 Your 2017 tax rate was very low, and your 2018 tax rate is still low. You realize that people who earn not much more than you have much higher tax rates right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Nothing you can do except press on your elected officials to introduce new federal tax legislation.

How about pressing your state and local legislators to introduce less burdensome state and local tax rates?

AKA defund good public schools in Blue states. This what that tax bill was all about.

I live in virginia and have much lower local taxes and access to excellent schools. Money is just managed etter.