MD Taxes and SALT

[Anonymous]

Anonymous wrote:for a roughly 200k income,

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

Similar numbers, but the big difference is we paid off student loans and put a big chunk towards our mortgage and had much much lowe loan deductions. Without that our effective tax rate would have been lower or the same.

Overall pretty happy with where taxes are at now.

[Anonymous]

Anonymous wrote:There are no way around it. Those of us in Blue states are screwed by the new tax law. Really, almost anyone who itemized is screwed.

yep, we lost 100k of deduction. makes moving to VA look better and better.

[Anonymous]

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.

ABove AMT threshold is way worse off. stupid ordinary income

[Anonymous]

Anonymous wrote:

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?

I am the person who posted these taxes to show that my tax rate increased not that they were high. I am not the one who said "that is bad." Someone else did. Yes, I realize I pay a low effective rate in federal taxes, and I wasn't complaining.

[Anonymous]

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

True, but they also eliminated the personal exemptions when they raised the standard deduction, so for a family of four, that's +$12K for the standard deduction and -$16K for the personal exemptions, plus a $4K child tax credit that helps offset it, along with the lower rates. So people losing $10K+ in SALT deductions really are still losing quite a lot.

How did you get $5k child tax credit? We got $2k

[Anonymous]

Anonymous wrote:

Anonymous wrote:There are no way around it. Those of us in Blue states are screwed by the new tax law. Really, almost anyone who itemized is screwed.

yep, we lost 100k of deduction. makes moving to VA look better and better.

Both Va and Md have the same state tax rate. 5.75%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are no way around it. Those of us in Blue states are screwed by the new tax law. Really, almost anyone who itemized is screwed.

yep, we lost 100k of deduction. makes moving to VA look better and better.

Both Va and Md have the same state tax rate. 5.75%

No, in MD there is also a count portion which for MoCo is 60% of the state tax. So the effective rate is 9.2%.

[Anonymous]

Count s/b county

[Anonymous]

My AGI went up by 1.6%. My federal taxes increased by 7%. I'm in that $150-$200K range that got screwed here.

[Anonymous]

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

True, but they also eliminated the personal exemptions when they raised the standard deduction, so for a family of four, that's +$12K for the standard deduction and -$16K for the personal exemptions, plus a $4K child tax credit that helps offset it, along with the lower rates. So people losing $10K+ in SALT deductions really are still losing quite a lot.

How did you get $5k child tax credit? We got $2k

The child tax credit is $2K per kid under the age of 17. And $500 for those 17 or over. To get a $5K tax credit, a person would likely have 2 children under age 17 and 2 children 17 or older.

[Anonymous]

Anonymous wrote:How did you get $5k child tax credit? We got $2k

Easy. Obviously PP has the average American family and has 2.5 kids.