For those who currently itemize deduction, the elimination of the personal exemption means many will

[still_one]

not only fail to realize a tax cut, but will actually cause and increase in thei tax liability

[Eliot Rosewater]

1. Many middle class folks who have small investments like a rental

and a home they own will be hit REAL hard by this.

But, billionaires dont have enough money. so it is necessary

[still_one]

6. For rental property I believe you will still be able to realize the full interest rate and property

tax deductions

[D_Master81]

17. still should

the deduction for rental property is taken on schedule E while the mortgage int deduction would be on the itemized Sch A. Trying to make this as simple as I can

[sinkingfeeling]

2. Yeah, I know. Plus the loss of state income tax deduction.

[wryter2000]

5. How about property tax?

That's much higher than my income tax.

[still_one]

7. It looks like Property tax deduction will have a maximum cap of 10K, so it won't be completely

eliminated, but at least here in California, it will impact a lot of folks:

http://money.cnn.com/2017/12/02/pf/taxes/senate-tax-bill-passed/index.html

The personal tax exemption is 4050, so for two people that would be 8100. The Standard Deduction will be increased for two people will increase from 12000 to 24000. For those that currently itemize deductions, that 8100 is significant. That means for those who currently have 16000 dollars in itemized deduction, there will be no reduction in taxes for them, and for those who currently have more than 16000 dollars in itemized deductions, there will actually be a tax increase, amplified by the elimination of this personal exemption, and probable removal of the State Income Tax deduction

[Eliot Rosewater]

13. Tax increase, AWESOME

but billionaires, no

I hope people become ENRAGED physically

[still_one]

25. I hope they become enraged in the voting booth

[lindysalsagal]

24. In the end, with the the double non-itemized deduction, you may still come out ahead.

Which erodes the case for personal property ownership, and may drive home values way down, for lack of incentive.

That spells next recession. And we all know how that goes, rinse, repeat.

[still_one]

36. The elimination of the 8100 dollars for a couple from the personal exemption will impact those

adversely who have itemized deductions greater than 16K. Those in that category most likely will be paying more taxes than before.

Let's assume a couple whose itemized deductions with mortgage interest, home equity interest, property tax, etc. today is 21000. With the republican tax plan, that couple will now be forced to take the increased standard deduction of 24000, but will not be able to claim any personal exemption, which means that they will be taxed on a higher income than they would have been taxed under the current tax system, and even with the new tax brackets, they would be paying more taxes under the republican plan, than what they were paying.

People who currently itemize deductions, with the elimination of the personal exemption will in fact be paying more taxes than before.

I agree with your assessment that this has the potential to adversely affect real estate prices, especially if they CAP the mortgage interest rate deduction at 500K, instead of one million, and eliminate a deduction for interest on Home Equity Loans which can be up to 100K.

This tax plan is voodoo economics, where large corporations will benefit the most from having their tax rate reduced from 35% to 20%. The republicans believe that will incentivize companies to hire more, and bring corporate money invested foreign countries back home. There is no evidence to support that, and in fact when Kansas and Oklahoma did something like this, it only allow corporate executive to realize larger bonuses, and the anticipated jobs were not realized. This is a form of Reaganomics, trickle down economics, which was a complete disaster, and caused a tremendous increase in our deficit. In fact it was under Reagan which gave us the way AMT is based today, because the deficit was getting so out of hand.

David Stockman resigned under Reagan before his trickle-down economics took effect, because he realized just how irresponsible it was.

History will repeat itself, and I suspect it is going to be even worse with their intent to dismantle Dodd/Frank, and start the process of removing regulation again.

[subterranean]

41. You described my situation, pretty much.

I itemize, and the loss of the personal exemption will more than cancel out any benefit I get from taking the higher standard deduction.

Great. So my taxes will be going up in order to give the Trump family a big tax cut.

[still_one]

46. You are not alone in that boat. The faclacy of this whole misadventure is that they are

selling that decreasing the corporate tax rate from 35% to 20% will automatically cause those companies to massively start to hire people, and that simply is not how companies hire people, because their tax rate goes down.

It is NOT a mischaracterization that the middle class will paying for the tax break for the wealthiest in this country

As I understand it 2019 is when the full impact of this will start to take effect, and there is a small chance that if we can take back Congress in 2018 this can be stopped

[wryter2000]

65. Thanks

I don't think it will affect me. This bill still sucks bigly.

[still_one]

66. There are a lot of reasons it sucks, probably the prominent being the impact on health care

[wryter2000]

67. Agreed

I can't believe the Rs who voted against Trump on health care voted for this.

[Wellstone ruled]

3. Those Seniors who voted GOP

will be hit the hardest. In our house,it means a Tax bill of at least a thousand dollar increase. Those Mandatory IRA with drawls are killer. Appears to be taxed at 28%. Tried to make sense of the new language,wow,take away the normal deductions,and you have to with draw IRA funds to pay your Tax Bill.

[still_one]

4. What about those Seniors who voted Democratic?

I know, same pain

[Wellstone ruled]

9. And it will be the Blue state

Seniors who vote Dem that will get hit even harder.

[still_one]

10. yes we will

[Wellstone ruled]

11. How well I know.

Most of our family lives in Blue States. And yes they voted for Trump. Shit happens and they get zero empathy from us.

[still_one]

12. Everyone has someone in their family who goes off the wayward path. Myself and family who live in

California are solid blue. A couple of relatives in other states I don't inquire who they voted for though I suspect the worst

[Wellstone ruled]

14. Mine are in Minny.

But,they will learn the hard way.

[still_one]

23. Minnesota is a solid blue state. I Went to military school in Faribault Minnesota many moons ago

Winters are very cold

[Wellstone ruled]

33. The Winters aren't that bad.

You learn to layer. Just do not lick a steal pole or post January. Familiar with Shatuck. Business Account years ago.

[still_one]

38. Jean Shepard's "A Christmas Story". I was born in Iowa, and had to walk to school in the snow

uphill both ways. At least that is what used to tell my daughter

[Wellstone ruled]

39. Yup,don't forget the Brass Monkey.

[dflprincess]

50. An article in today's Star Tribune

Reports how mild our winters are getting. I'm using my phone right now and can't figure out how to link to the story.

[still_one]

51. That may be now,but I remember the wind chill factor and it was cold. I am in California now, and

I like the winters just fine here

[meow2u3]

35. Don't blame the seniors who voted Democratic

It's not their fault reTHUGS chose to steal from them in the middle of the night.

[Frustratedlady]

28. Is 28% the new rate? I thought the purpose was to be able to pay a lower rate when you

cashed in the yearly requirement. So, if you end up at 15%, that's where you get taxed. That would no longer be true?

Ratz if they increased it that much. Jerks!

[MarcA]

32. That's a very good question.

If that is the case wouldn't it be prudent to do some withdrawals before
December 31st. Of course if nothing is finalized until after December 31st
how would one know. I mean anyone outside .1% and their high ranking
sycophants aka Congress.

[Frustratedlady]

34. But that wouldn't count as the required withdrawal, would it?

I've already withdrawn what was required for last year (after the 1st of 2017). What I'm concerned about the most is the extra I withdrew for some remodeling. Judgment Day.

[MarcA]

37. I hope someone like AARP can get helpful info on this

I really don't know and don't know if or When anyone will.
I was just thinking of the prudence of doing something before
the end of the current tax laws.

[roamer65]

8. The religious nuts who have big families are gonna get whacked hard.

Oh well... too bad...so sad.

[madinmaryland]

20. The Duggers with 18 kids.

🤣

[roamer65]

22. Yup.

You must be a mind reader.

[MontanaMama]

52. They are millionaires a few times

over. The Dugger's will be a-okay.

[Ms. Toad]

54. The Duggers wtih 18 kids

(Assuming all under 18 - which we know they are not)

Would lose $72,900 in personal exemptions. That's 8748 in taxes at the lowest tax bracket
They would gain 18,000 in tax credits - a 9252 windfall.

I call that making out like a bandit.

(As long as their taxable income is below $320,000, they still come out ahead)

[Zambero]

56. They'll need to marry off any teenage daughters

Real quick. Let the "courtship" begin!!!

[PoindexterOglethorpe]

29. Wait, won't families like that do better?

Isn't the deduction/exemption (I'm sorry that I'm a bit confused on the correct terminology) for each dependent doubling? That's bound to be worth a great deal more than a lot of itemizing is.

I'm a senior who will probably benefit from this, because I can't itemize any more: the standard deduction has been better for me the past year or two. My actual income is low enough that I may soon be at the point where I won't even need to file any more. I have no earned income (no job) and rely on SS, a small pension, and income from investments.

However, this tax bill is a complete abomination, and if my SS gets cut I'll be hurting.

[VMA131Marine]

44. No they won't do better

The standard deduction for a married couple filing jointly is currently $12700 independent of how many kids they have, That will go to $24000 under the Senate plan. The personal exemption is $4000 for the taxpayer, and each dependent. So a married couple with one child gets $12000 in exemptions but a couple with ten kids would get $48000 in exemptions (you can see where this is going) . Under the new plan this family would still only get the $24000 standard deduction and would be subject to taxation on an additional (60700-24000=)$36700 of income. I think the child tax credit goes up a bit so the situation isn't quite as bad as it could be but that large family will still take a hit.

[subterranean]

45. The child tax credit will probably increase, but personal exemptions are going away.

Currently, you can deduct $4,050 for yourself and each dependent from your taxable income. The proposed bill does away with that exemption. My taxes will almost certainly go up as a result, and I'm not wealthy by any stretch of the imagination.

The doubling of the standard deduction should benefit people in your situation, though.

[Ms. Toad]

53. Not by my calculations - assuming you're talking about the personal exemption

Each child gets an increase in the child tax credit of 1000.

The personal exemption was 4050. So for each child, you pay taxes at 12% on income that is 4050 higher (about $608) and get an additional $1000 tax credit under the bill. That's a cut in taxes of ~$392 per child.

Until you hit $320,000 in taxable income, you're better off with the increased credit than the personal exemption.

(Simplified - the math isn't quite the same for the lowest income brackets because the tax credit is not refundable, adn there are caps, etc.)

[VMA131Marine]

58. It's pretty much going to be a wash if you are in the 25% tax bracket isn't it?

Although, with the credit instead of the exemption you will get put in the higher bracket with less gross income.

[Ms. Toad]

59. 25% is a wash; 32% is loss under the new system.

But the loss doesn't come until you have taxable income (i.e. after deductions, IRA, 401(k), etc.) of $300,000 or so. At that point, I'm not too sorry for you.

You're correct you get there a little earlier, but not that much (relative to the income that puts you there - but the marginal rates are also lower, so you'd have to offset the earlier arrival against the tax benefit in each bracket. That's more than I assume most people on DU {want to} understand about how the tax sausage is made - i was keeping it at the 10,000 foot level with the 2 variables most important to this question.)

[hermetic]

15. It's not a done deal, yet

We still have time to let our representatives know how horrible this bill is. Use your voice, and contact your senators using TrumpTaxToolkit.org.

https://trumptaxtoolkit.org/

Then, sign some petitions...

https://murraysenate.bsd.net/page/s/i-oppose-the-tax-scam-bill?source=em171202-taxbill

http://action.chrismurphy.com/page/s/tax_cuts_for_rich?source=em171202-full

[cbdo2007]

16. Aren't they doubling the standard deduction?

If so that would make most of our previous itemized deductions moot.

[D_Master81]

19. kinda

they double the standard deduction BUT got rid of the personal exemption for every person on the tax return. as it was if you're married w/ no kids, you got a 12,600 standard ded PLUS 4,050 for each person, so techincally you got a deduction of right at about 20k. so in a way they're telling you the standard ded is doubling when in reality its going up by about 4,000. If your itemized deductions are over like 16,000 this would equal a tax increase.

[spooky3]

27. One of the versions eliminates state and local income tax AND property taxes.

For many people in high tax states, those ALONE are more than even the doubled standard deduction, especially for singles (whose doubled standard deduction is only half that for marrieds, even if they pay for a house alone). And when you add in mortgage interest, contributions, medical expenses, etc., the balance shifts even more.

[ecstatic]

48. For now. They'll expire in 10 yrs, at which point all deductions will be gone

AND we'll get a sharp increase to make up for sharp decline in revenue. SMH

[Cicada]

18. Contributions to charities, churches, will no longer reduce tax

Republicans say people act in response to tax incentives. If you don’t itemize charitable contributions don’t reduce tax.

[spotthebird]

31. Isn't that anti-God?

I avoided this nightmare because it was just too upsetting, and there wasn't a damn thing I could do about it. This was worse than I knew.

Taking this much money out of the pockets of the middle class and charities will really hurt the economy.

[Cicada]

40. Even worse, its anti pro-Republican preachers

[Pachamama]

21. I know few people who are going to benefit from this tax rape bill....and they are all very rich

Most people are going to be shocked when they see what it does to them....

People who were looking at divorcing - can't deduct alimony

People who were thinking of getting further education and training - can't deduct the costs of their eduction

The list goes on....

Its going to be a very painful pill to swallow and the only good news is that it will hopefully wake people up about the GOP....

[DFW]

26. I have zero mercy for those who voted for Republicans who let this happen

This is going to hit tens of millions who think it's tax "relief" because Fox Noise told them so. Only when they find out the hard way, and start shouting, "but I thought...!!!!" will they find out. The bad news is that 75% or more of them will STILL vote Republican because their newfound misery will somehow be made "the libbruls' fault" by right wing media, and they will actually believe it. Republicans will increase the cops on the street to cope with the hundreds of thousands of new homeless panhandlers.

Today's average Republican voter is the condemned man voting to increase the budget in order to pay for his firing squad's ammunition.

[still_one]

43. I don't think any of us here have sympathy for them, but I think it is a concern that not only will

the deficit increase, when the supposed increased jobs do not materialize, there will be even more draconian measures against the social safety net programs.

Corporations are not going to just hire people because they have a tax break from 35% to 20%, and that assumption is the entire fallacy of the boon doggle

[DFW]

63. After ALL the times that trickle-down has proved to be fictitious

Anyone who still believes that one should should be standing out in the pumpkin patch with Linus on Halloween expecting the Great Pumpkin to arise, Fox or no Fox.

Any Republican voter who acts surprised at the ills that will befall them will just have a much harder time convincing me this time that they had no idea what they were voting for. It's not like there was a lack of information, but rather that they willfully chose to ignore that which was available to them. Between that and the lie, they chose the lie of their own free will.

[still_one]

64. Sure has DFW, and it has failed several times

[spotthebird]

30. Holy shit! That's huge! The personal exemption has been eliminated?!

Why isn't this major news? That must be why they had to vote on this last night, while Flynn was still the only story.

[Ms. Toad]

55. That's been in every proposal I've seen floated for weeks.

It wasn't a new thing added yesterday.

[madville]

42. I've never itemized on a tax return

Will this hurt me or help me? If the standard deduction is doubling it sounds like it will help me in my circumstance.

[ChubbyStar]

47. Standard deductions are NOT doubling.

A quick Google search will tell you your deduction for 2017.

[B2G]

49. It looks to me like they are

I did Google it.

What are you looking at?

[ChubbyStar]

57. IRS website

Increases of $100 or $50 depending on filing status.

https://www.irs.gov/newsroom/in-2017-some-tax-benefits-increase-slightly-due-to-inflation-adjustments-others-are-unchanged

[madville]

61. That's current law and rules

We are talking about the proposed tax bills the House and Senate have passed, it almost doubles the standard deduction for single and married filers.

money.cnn.com/2017/12/02/pf/taxes/senate-tax-bill-passed/index.html

[ChubbyStar]

62. Okay I understand now, what about heads of households

Any change there?

[madville]

60. The new tax bill doubles it, not the current rules

"Nearly doubles the standard deduction: The House and Senate bills nearly double the standard deduction. For single filers the Senate bill increases it to $12,000 from $6,350 currently; and it raises it for married couples filing jointly to $24,000 from $12,700."

money.cnn.com/2017/12/02/pf/taxes/senate-tax-bill-passed/index.html

That's pretty good for me.