I'm A CPA, I Assure You That 2018 Tax Returns Will Not Be Filed On Postcards

[SoCalMusicLover]

They may be simplifying some aspects of the code, but by no means is the tax code becoming simple.

The states with high Income Taxes are going to be hit the hardest, since the deduction for those will be gone. As someone in CA, I think the people here don't realize how significant that will be in terms of Itemizing versus using the Standard Deduction. And it will impact the middle class hardest, since those people have Property Taxes & Mortgage Interest enough that they itemize, but now will lose a significant portion due to the elimination of CA Income Tax deduction.

[Yonnie3]

1. The loss of the deduction for medical expenses would have been a big issue for me.

I bought insurance on the open market for six years and then the ACA plans until I got medicare. The tax savings were significant and covered the cost of more than two months of insurance. Doubling the standard deduction helps but just doesn't fully cover it.

I don't know how many people are going to be affected by this particular change. I haven't yet seen any estimates.

[Doodley]

4. Yes, that will screw me too. We pay a third of income on healthcare.

[lapfog_1]

2. yes, it's screw the middle and upper middle class

specifically those in blue states like CA.

the lower middle class and the poor will see nothing from this.

Corporations will NOT hire more people nor will rich fucks start more businesses... there is NO lack of capital in the US. There IS a lack of demand for more products. GDP overall will be unaffected.

On the other hand, I expect the US debt to explode (again, on top the explosion that happened due to the mini-depression). That will mean that the US will spend more and more money on interest payments (that will go astronomically up as the bond ratings fall)

Get ready for a real depression.

[Johonny]

12. Watch the service economy get squeezed. If middle class taxes go up...

that's going to come out of peoples budgets somewhere. Worse, people will over compensate because with so many bad ideas floating around, Who knows how badly they're getting hit until that first return. I sure know its going to be a loss of around 20 K in deductions I used to have now...that's going to be brutal and cause me to spend way less because that's the back of the envelope guess. I have to think it might be even worse.

[lapfog_1]

14. yup, there is real risk that this will cause a bagel

(fan of the West Wing TV show).

I'm going to lose maybe $4,000 to as much as $10,000 (haven't done the math yet).

For me, losing $800 or so a month means a lot... because I live in a very expensive part of the country.

But I'm already thinking about what I can cut out of my budget because I am certain they will pass this POS.

[Hoyt]

5. I know areas of California are high cost, but I don't see the state income tax deduction that big a

deal for MOST people (I do think it should be indexed in someway if it is not removed from the proposal).

Let's just say you make $200,000 taxable income. In rough figures, you pay about $20K in state income taxes. And right now you "save" roughly $5600 off federal income taxes related to the state income taxes you can deduct. Under Trump's plan -- which is deficient in a lot of ways -- you will save roughly $4500 or so (before factoring in the lost deduction) because the federal rate drops a bit on that first $200K. I can't get overly excited about that having to pay a little bit more in taxes.

Again, I think there should be tax relief for lower income and most middle-income earners, and tax increases for others. But some guy making $200K, even in California, getting socked with a couple of thousand increase in federal taxes is not the worst thing.

Point is, I'm for tax increases for higher incomes, but I can't get excited about someone making $200K having to pay a little extra. Again, I know housing is higher in California than most places.

Point is, poor-mouthing over loss of this deduction isn't what we ought to be criticizing in this plan.

[Justice]

9. Weird, tone deaf response.

[Hoyt]

10. Would you care to expand, offer a rebuttal or anything substantive?

[Justice]

17. very callous comment instructing people what they should be upset about.

"poor-mouthing" very derogatory

[cpamomfromtexas]

6. Another CPA agrees with you. Smoke and mirrors

[SoCalMusicLover]

8. Hello Texas

Of course, as you know, this has NO impact on those of you in TX, who don't have a State Income Tax.

[cpamomfromtexas]

18. The whole Republican proposal is smoke and mirrors for most people as I see it. I file for people

that live in various states.

[SoCalMusicLover]

19. Except The Corporations

I think the emphasis is on them in this proposal. I think they're going to have a tough time getting all the repubs on board for the various Individual changes, especially the State Tax elimination.

Haven't looked at it too closely, but won't the elimination of exemptions hurt those with larger families? I have clients with 3 or 4 kids, and it appears that they actually are worse off, at least taxable income wise.

[stopbush]

7. Oh, I think we denizens of CA know exactly how this will fuck us over.

It is targeted to hurt blue states.

[Initech]

13. Ugh I don't know how much more of this I can take.

[D_Master81]

11. standard deduction...

i saw they're proposing doubling of the standard deduction. So is the standard ded now going to be 25k? and if they do that are they still allowing for the personal exemption? I could see them doing away w/ the personal exemption while doubling the standard ded and just using a shell game. "Hey we're doubling your standard deduction" (even though now you get at least 20k of deductions off of your income w/ the personal exemption of 4k per person). I know that Trump has said he would let people deduct all of your daycare costs. which sounds great if you dont know how taxes work. But now you get a percentage as a dollar for dollar credit, whereas trump wants a deduction which is an "above the line deduction". so say you deduct 6,000 in daycare expenses and you're in the 15% tax bracket you save $900 in taxes. As it is currently you get a percentage as a tax credit. I dont know the numbers exactly but i believe its 10%, 20% and 30%. So if you're getting a 20% credit for instance youre saving $1200 on your taxes. Even at 10% its $600 so not much different. Trump says things that sound great but if you know how it works, there's not really much of a difference to how it works currently.

[SoCalMusicLover]

15. Yes, No More Personal Exemptions

The plan would nearly double the standard deduction, from $12,700 to $24,000 for married couples filing jointly. The personal exemptions in the tax code now, worth $4,050 for each taxpayer, spouse and dependent, would be eliminated.

A new family credit of $1,600 would replace the existing child tax credit of $1,000, and there would be $300 credits for each parent and non-child dependent, such as an elderly parent. The income cap for the credits would also be increased from $110,000 for a married couple to $230,000.

[TexasBushwhacker]

16. So if you have more than 2 children you pay more tax?

They are also takking away the "Head of Household" category. Screw you, single parents!