Reply to MD Taxes and SALT

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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[/quote]
Why do people keep forgetting that we also lost the personal exemptions?[/quote]

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).[/quote]

But my 18 year old dependent does not qualify for the credit...[/quote]
because the party of family values believes that once you turn 18, that's it, you should be on your own.  Something about bootstraps.[/quote]

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.[/quote]

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. [/quote]

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.[/quote]

Here are my numbers (rounded):

[b]2017 [/b][/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%

[b]2018 [/b][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%[/quote]

That is bad. :-(  [/quote]

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

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