How your tax bracket could change in 2018 under Trump's tax plan, in two charts

[Yo_Mama_Been_Loggin]

Income tax brackets could change in 2018 if tax legislation is enacted under President Donald Trump.

The Senate's bill proposes keeping seven tax brackets but changing the income ranges, while the House's version of the bill would reduce the number of tax brackets to four.

Both plans propose eliminating the personal exemption and increasing the standard deduction.

House and Senate Republicans have taken two different approaches in their attempt to overhaul the US tax code by releasing separate proposals with sweeping changes.

-more-

https://www.msn.com/en-us/money/taxes/how-your-tax-bracket-could-change-in-2018-under-trumps-tax-plan-in-two-charts/ar-BBEOWYI?li=BBnb7Kz

[safeinOhio]

1. Are those incomes before or after deductions?

Make a huge difference for me.

[Hoyt]

2. It's taxable income, which is after deductions.

[safeinOhio]

3. Thank you

I was starting to think I need an off shore account.

[Yo_Mama_Been_Loggin]

6. How many deductions will you have left?

They're eliminating the personal deduction.

[safeinOhio]

7. I thought it would be doubled and

replaced by removing other deductions. I never have enough to itemize. I do have a small business that just about breaks even.

[FarCenter]

14. The standard deductions are shown at the bottom of the charts

[FarCenter]

16. it is the personal exemption that is eliminated, per the bottom of the charts.

[GulfCoast66]

4. Huge windfall for the wife and I.

Fucks the country for decades to come. Some would be happy to pay MORE tax to insure we have a just and equal society. Because some us realize that current prosperity is no guarantee against future need.

Giving a childless Florida couple in their 50’s with an income of almost 200K a huge tax cut is a recipe for economic and societal collapse

[roamer65]

9. Yeah I get a decent tax cut.

But in 3-4 years the dollars I get won’t be worth shit, due to fiscal and currency crisis this POS is going to cause.

[groundloop]

22. yep, we'll get a small windfall also, which we don't need....

I'd much rather see Social Security and Medicare shored up.

[Joe941]

24. I suggested in another thread we donate savings to DNC.

didn't go over too well. But I'd just ask people who save a little to think about our candidates.

[GulfCoast66]

33. Thinking about giving ours to a charity clinic.

[drray23]

31. same thing here.

kids are grown up, we dont itemize since we own our house and have no medical expenses of any significance.
So, I calculated the tax liability and depending on the plan we save between $4100 (house) and $4800 (senate).

Now, as soon as you have kids you go under. Those deductions that you used to be able to take per kid are not there in their tax plan. So, with the same income (about 180k agi) we would pay more taxes under the new plan.

So, this horrible tax plan penalizes anybody making less than $90,000, anybody who makes up to 250,000 (as a couple) if they have kids. It only favors the very wealthy and people like me and my wife with no kids and both professionals with nice salaries.

This is a recipe for killing the middle class.

[roamer65]

34. It is also a recipe for population reduction through the personal deduction elimination.

The birth rate in this country will tank. It is the only positive thing I see about this POS bill.

This thing has a lot of holes that a Dem majority and president can change with no repercussions.

Such as changing the 38.5 top rate to 50 percent. It was so sloppily written that Dems will have a field day with it in 2021.

[Kilgore]

39. Us too

Guess we are the sweet spot.

[greeny2323]

5. Are these part of the changes that eventually expire? n/t

[DFW]

8. If these numbers are accurate

Then it will only affect my elder daughter, as she still lives in the USA, and if she is not allowed to deduct her state income tax from her federal income, she will be hit for a four figure rise in her taxes. If Sen. Collins' last minute concession of deducting State taxes up to $10,000 stays, the my daughter is covered, as she makes nowhere near enough to pay $10,000 in state income tax, even in New York City, and her Federal bracket will be virtually unchanged. Like me, my younger daughter lives and works in Germany, so she pays the same 50% rate* I theoretically do (it kicks in at 60,000 euros here).

*The official top rate here is published at 42%, but there are add-ons and supplements, so the real rate is about 50%, and health insurance is NOT included. PLUS: here there is a 20% national sales tax (VAT) on just about EVERYTHING.

[subterranean]

10. Sen. Collins' amendment applies to property taxes, not state income taxes.

So your daughter's taxes might go up if she doesn't own property.

[DFW]

18. Own property in New York City?

If she marries Warren Buffett maybe. No, if state income taxes are not deductible, she just got a nasty four figure tax increase.

[B2G]

11. So based on this,

How is the middle class getting screwed over?

[roamer65]

13. Middle class homeowners with kids are getting killed on the loss of deductions.

SALT and loss of the personal deductions.

[Kingofalldems]

15. Are you in favor of the GOP plan?

[B2G]

17. I'm trying to understand it.

It's complicated. I don't even fully understand the current code. My first step is assessing personal impacts. Which is what 99% of what most people do.

[Joe941]

25. I'm trying to understand it too...

At first glance it does appear like a tax cut for my wife and i. I know it's bad but exactly why?

[Yupster]

40. The big question is do you itemize?

I don't.

Most people don't.

If you don't either it's a tax cut for you. If you do itemize, you might lose enough deductions to offset the cut in rate and increase in the standard deduction.

Over the last 30 years or so the standard deduction has risen to the point where most people can't itemize anymore. They just take the standard deduction.

[MaryMagdaline]

29. I think the magic number is 3 kids

3 kids or more, you will get hit hard.

[Amishman]

38. By exploding the debt further to give money to businesses

My family comes out ahead in this as well, but it's not worth it to keep piling on more debt. We already have a deficit problem before all this. We should be hiking takes on the rich, not giving them more

[roamer65]

12. If I had my way Id crank that 38.5 rate up to 50 percent.

[DFW]

21. I sure as hell wouldn't. Not without eliminating state income taxes.

States like New York and California have big state income taxes. Texas has none. The inequality is already glaring without making the Federal income tax so high as to encourage mass migration as well as capital flight. If the elimination of the deduction state income taxes from federally taxable income is permanently eliminated, the middle classes of those states alone just got slapped with billions in tax hikes.

Trump is chuckling because he gets his wish to punish those states that voted against him. But it is not a coincidence that many of the states that voted against him are the most desirable ones to live in. He can't stand that, either. The protests of Senators and Congresspeople from NY and CA will be music to his ears. Kim Jong Who? Trump and the Republican Congress just made the states of New York and California less desirable to live in without sending a single missile.

[VMA131Marine]

26. I'm with you! Don't forget the top rate in the '50s was

Over 90%.

[spooky3]

32. Yes, but it was not applied until people earned a LOT more than the current cutoff

for the highest rate today (if you correct for inflation).

[roamer65]

35. Someone making $1M a year can afford a 50 percent rate.

[spooky3]

37. Yes. There is no (good, IMHO) reason why the range cutoffs stop at half that amount.

[VMA131Marine]

36. That could be arranged .....

[lindysalsagal]

19. We're currently taxing $38k $10k??!!?? Seriously???

I did not know that. Insane!

[Yo_Mama_Been_Loggin]

20. Taxable income

after deductions

[janx]

23. Tell me about it. . . n/t

[Hoyt]

27. No. We're taxing $0 - $10,400 at 0%, the next $9,325 at 12%, the next $20,275 at 15% if you make

$40,000 and don't itemize deductions and have any credits. It will be less than that under both plans for the next 10 years or so.

Of course, there is also FICA to take into account.

[Yonnie3]

30. We are not being taxed that much

Here is how I calculate tax for 38,000 salary or wages
Assuming single, no dependents (other than self), no IRA contribution and not filing itemized.

38,000 wages
-6,350 standard deduction
--------
31,650
-4,050 exemption
--------
27,600 Adjusted gross income

first 9,325 is taxed at 10% 932.50 tax
the rest 18,275 is taxed at 15% 2741.25
Total tax is 3673.75

For 2016 the tax table in my 1040-ez instructions say the tax on 27,600 is 3680. They do some serious rounding.

HTH

[Yupster]

41. No we're not

The 25 % bracket only starts with the dollars over 38 k.

First you pay nothing on the amount of the standard deduction. Then you pay 10 % or 15 % on the amount up to 38 k. Then you pay 25 % on the amount over 38 k.

The percentage you actually pay is called your "effective tax rate."

For a person making 38 k it's more likely to be somewhere around $ 3,000 tax depending on number of kids, married, deductions, etc.

[Luciferous]

28. Looks like my family will get a decent tax cut, but whatever extra money

we are getting is going to savings so that when the economy inevitably tanks we'll have a little extra savings to fall back on.

[dflprincess]

42. I'm single and don't itemize.

Using last year's adjusted gross income and these charts the current one did come within a few dollars of what I paid last year so I assume these are pretty accurate. Using the Senate and House charts I would, in the short term, save between $2K and $4k annually.

But I'm not an idiot or completely self centered.

I have a habit of not paying much attention to my gross income until I have to file my taxes each year. Why bother? - it's how much goes into the checking account that I care about. I'm use to what my net income is and I don't do too badly. Another $200 or so a month would be nice, but not at the expense of CHIP, education, food stamps, etc.

Here's where the self interest comes in. I'm 64. For almost 50 years I have been paying into Social Security & Medicare. I plan to retire when I'm 70 - something I can't do if SS and/or Medicare are gutted. Also something I can't go if my 401K takes a big hit if the stock market tanks.

Monday morning I plan to call the outfit that handles my employers' 401K plan and make sure my money is all in the least risky funds they have available.