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How the GOP tax plan hurts many

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Rich123

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Suppose you earned $60,000.00 and didn't do with holdings through the fiscal year and you have two children, one 17 and one month years old and the other is 18 years old. Your are also married and filing jointly.

Under the GOP tax plan you could claim the $24,000.00 standard deduction.

But you can not claim the personal exemptions as the GOP plan eliminates that.

How ever the GOP plan has increased the child tax credit from $1,000.00 to $2000.00. However the provision to use the child tax credit requires your child to be under the age of 17 years old. So that doesn't apply here.

After everything is computed this filer will owe $4447.50.

Now take that same filer and if he could file only by the 2018 guidelines he would,

Get the standard deduction of !3,000.00

He could use the personal exemption of $4150 for each of the people he can claim which would result in an addition deduction of $16,600.00

After doing the math this filer owes $3607.50

The significant difference in this case is the GOP's elimination of the PERSONAL EXEMPTION. In both cases neither filer can claim the child tax credit but the personal exemption applies to all people who live in your home and you support. In this case the GOP tax plan has cost this filer an additional $840.00
 
Rich123 said:
Suppose you earned $60,000.00 and didn't do with holdings through the fiscal year and you have two children, one 17 and one month years old and the other is 18 years old. Your are also married and filing jointly.

Under the GOP tax plan you could claim the $24,000.00 standard deduction.

But you can not claim the personal exemptions as the GOP plan eliminates that.

How ever the GOP plan has increased the child tax credit from $1,000.00 to $2000.00. However the provision to use the child tax credit requires your child to be under the age of 17 years old. So that doesn't apply here.

After everything is computed this filer will owe $4447.50.

Now take that same filer and if he could file only by the 2018 guidelines he would,

Get the standard deduction of !3,000.00

He could use the personal exemption of $4150 for each of the people he can claim which would result in an addition deduction of $16,600.00

After doing the math this filer owes $3607.50

The significant difference in this case is the GOP's elimination of the PERSONAL EXEMPTION. In both cases neither filer can claim the child tax credit but the personal exemption applies to all people who live in your home and you support. In this case the GOP tax plan has cost this filer an additional $840.00
Click to expand...

Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
 
beerftw said:
Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
Click to expand...

Apparently he's hinging this on the large number of American's whose only dependents are older than 17 but younger than 18, and claiming that they count under current rules, but not under new ones?

No idea where he's counting the 18 year old, however, unless he is assuming he's in college, in which case they can claim some pretty major college deductions, and aren't likely to be using the standard.
 
Rich123 said:
Suppose you earned $60,000.00 and didn't do with holdings through the fiscal year and you have two children, one 17 and one month years old and the other is 18 years old. Your are also married and filing jointly.

Under the GOP tax plan you could claim the $24,000.00 standard deduction.

But you can not claim the personal exemptions as the GOP plan eliminates that.

How ever the GOP plan has increased the child tax credit from $1,000.00 to $2000.00. However the provision to use the child tax credit requires your child to be under the age of 17 years old. So that doesn't apply here.

After everything is computed this filer will owe $4447.50.

Now take that same filer and if he could file only by the 2018 guidelines he would,

Get the standard deduction of !3,000.00

He could use the personal exemption of $4150 for each of the people he can claim which would result in an addition deduction of $16,600.00

After doing the math this filer owes $3607.50

The significant difference in this case is the GOP's elimination of the PERSONAL EXEMPTION. In both cases neither filer can claim the child tax credit but the personal exemption applies to all people who live in your home and you support. In this case the GOP tax plan has cost this filer an additional $840.00
Click to expand...

Too bad, 840 dollars, but have they closed any loopholes for the rich?
 
beerftw said:
Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
Click to expand...

Many 18 year olds are still in high school.
 
cpwill said:
Apparently he's hinging this on the large number of American's whose only dependents are older than 17 but younger than 18, and claiming that they count under current rules, but not under new ones?

No idea where he's counting the 18 year old, however, unless he is assuming he's in college, in which case they can claim some pretty major college deductions, and aren't likely to be using the standard.
Click to expand...

Please elaborate on the college deductions. I am under the impression that they have been eliminated.
GOP Tax Bill: What Will Change for Students | Money
 
JMR said:
Please elaborate on the college deductions. I am under the impression that they have been eliminated.
GOP Tax Bill: What Will Change for Students | Money
Click to expand...

Well that’s what happens when you rely on a 2 month old article to tell you about a bill that just got passed. There ended up being no modification to the student loan deduction or the graduate tuition waiver
 
Exquisitor said:
Too bad, 840 dollars, but have they closed any loopholes for the rich?
Click to expand...

Why are you worried about the rich? Do you earn that much?
 
Rich123 said:
Suppose you earned $60,000.00 and didn't do with holdings through the fiscal year and you have two children, one 17 and one month years old and the other is 18 years old. Your are also married and filing jointly.

Under the GOP tax plan you could claim the $24,000.00 standard deduction.

But you can not claim the personal exemptions as the GOP plan eliminates that.

How ever the GOP plan has increased the child tax credit from $1,000.00 to $2000.00. However the provision to use the child tax credit requires your child to be under the age of 17 years old. So that doesn't apply here.

After everything is computed this filer will owe $4447.50.

Now take that same filer and if he could file only by the 2018 guidelines he would,

Get the standard deduction of !3,000.00

He could use the personal exemption of $4150 for each of the people he can claim which would result in an addition deduction of $16,600.00

After doing the math this filer owes $3607.50

The significant difference in this case is the GOP's elimination of the PERSONAL EXEMPTION. In both cases neither filer can claim the child tax credit but the personal exemption applies to all people who live in your home and you support. In this case the GOP tax plan has cost this filer an additional $840.00
Click to expand...

That is definitely robbery since their effective (taxes due as a percentage of gross income) federal income tax rate went from 6% to 7.4%. Federal income tax burdens that high make going to work hardly worth the effort any more.

I hope everyone realizes that these folks will have to make terrible sacrifices to manage their income loss of $16.15 every week. That is jerking over $4 out of each of their pockets each and every week! That is about the price of a BK Whopper!

Imagine if your rent suddenly went up by $70/month - that would be catastrophic for a family of 4 with an an income of only $60K.
 
Rich123 said:
Suppose you earned $60,000.00 and didn't do with holdings through the fiscal year and you have two children, one 17 and one month years old and the other is 18 years old. Your are also married and filing jointly.

Under the GOP tax plan you could claim the $24,000.00 standard deduction.

But you can not claim the personal exemptions as the GOP plan eliminates that.

How ever the GOP plan has increased the child tax credit from $1,000.00 to $2000.00. However the provision to use the child tax credit requires your child to be under the age of 17 years old. So that doesn't apply here.

After everything is computed this filer will owe $4447.50.

Now take that same filer and if he could file only by the 2018 guidelines he would,

Get the standard deduction of !3,000.00

He could use the personal exemption of $4150 for each of the people he can claim which would result in an addition deduction of $16,600.00

After doing the math this filer owes $3607.50

The significant difference in this case is the GOP's elimination of the PERSONAL EXEMPTION. In both cases neither filer can claim the child tax credit but the personal exemption applies to all people who live in your home and you support. In this case the GOP tax plan has cost this filer an additional $840.00
Click to expand...

https://townhall.com/tipsheet/guybe...uts-taxes-for80-percent-of-americans-n2424201

<snip>
The average tax cut will be $1,600, according to TPC's data

(Republicans cite a different statistic: A tax cut of more than $2,000 for a median income family of four).

Let those numbers marinate for a moment.

We've been caught in a blizzard of misinformation claiming that this bill hurts the middle class.

But even the Republican-hostile Tax Policy Center couldn't escape the empirical conclusion that 80 percent of all Americans will see their taxes reduced under the bill
<snip>
 
Rich123 said:
Suppose you earned $60,000.00 and didn't do with holdings through the fiscal year and you have two children, one 17 and one month years old and the other is 18 years old. Your are also married and filing jointly.

Under the GOP tax plan you could claim the $24,000.00 standard deduction.

But you can not claim the personal exemptions as the GOP plan eliminates that.

How ever the GOP plan has increased the child tax credit from $1,000.00 to $2000.00. However the provision to use the child tax credit requires your child to be under the age of 17 years old. So that doesn't apply here.

After everything is computed this filer will owe $4447.50.

Now take that same filer and if he could file only by the 2018 guidelines he would,

Get the standard deduction of !3,000.00

He could use the personal exemption of $4150 for each of the people he can claim which would result in an addition deduction of $16,600.00

After doing the math this filer owes $3607.50

The significant difference in this case is the GOP's elimination of the PERSONAL EXEMPTION. In both cases neither filer can claim the child tax credit but the personal exemption applies to all people who live in your home and you support. In this case the GOP tax plan has cost this filer an additional $840.00
Click to expand...

Fuzzy math there, dude.

You forgot to factor in the drop in the federal tax rate from 15% to 12%.

Your example family, under the existing plan would pay $4,665.
Under the GOP plan, they will pay $4,320.
That's a savings of $345.

Not a huge savings, grant you, but still a savings.

60,000 minus the old standard deduction plus exemptions equals $28,900, and when taxed at 15% that is a payment due of $4,665.

60,000 minus the new standard of $24,000 (and no exemptions) leaves us with $36,000, and when taxed at the new rate of only 12%, the payment due is $4,320.

And, that's just for a family of four with two kids over 17. If the two kids were younger, the parents would get an additional $4,000 child care credit.

At any rate -- don't quit your day job and become either a mathematician or a paid tax preparer.
 
 
Crovax said:
Well that’s what happens when you rely on a 2 month old article to tell you about a bill that just got passed. There ended up being no modification to the student loan deduction or the graduate tuition waiver
Click to expand...

Sorry, my bad. I knew they had been on the chopping block, glad they were saved. My situation still ends up a substantial tax increase, so I'm not seeing a lot of good side to this bill. I know Donald says we are all gonna be so happy to see so much money in our checks in February. Maybe not as happy as he will be however.
 
JMR said:
Sorry, my bad. I knew they had been on the chopping block, glad they were saved. My situation still ends up a substantial tax increase, so I'm not seeing a lot of good side to this bill. I know Donald says we are all gonna be so happy to see so much money in our checks in February. Maybe not as happy as he will be however.
Click to expand...

Well doubling the standard deduction is pretty big for most people
 
Crovax said:
Well doubling the standard deduction is pretty big for most people
Click to expand...

I'm not sure for most people...certainly not me, but then I live in a high tax state, and as I have learned some posters here feel this is some type of comeuppance to blue state citizens.
Also the loss of medical cost deductions is pricey for many people.

In addition, the doubled standard deduction expires in a few years, and that will result in a tax increase that will have everyone screaming! Wonder if the timing of the expiration has any political significance? Have to give that a look.
 
JMR said:
I'm not sure for most people...certainly not me, but then I live in a high tax state, and as I have learned some posters here feel this is some type of comeuppance to blue state citizens.
Also the loss of medical cost deductions is pricey for many people.

In addition, the doubled standard deduction expires in a few years, and that will result in a tax increase that will have everyone screaming! Wonder if the timing of the expiration has any political significance? Have to give that a look.
Click to expand...

The medical deduction is still there and it’s actually expanded for ‘17 and ‘18, maybe you should read up on the final bill and not just the scare tactics around it
 
Crovax said:
The medical deduction is still there and it’s actually expanded for ‘17 and ‘18, maybe you should read up on the final bill and not just the scare tactics around it
Click to expand...

I see the final plan includes the medical deduction. Sorry for this second error. That was a late change, which I am glad for. Now tell me you found where the property tax deduction is still a go...over $10,000 of course.

The scare tactics includes the fact that a huge tax overhaul occurred behind closed doors, with no hearings, no bipartisan support, with vote getting bargaining resulting in pencil changes in the margin. No time allowed for Budget Office to make determination, no listening to economists ...no understanding at all of the meaning DELIBERATE. It was hastily thrown together in order to satisfy donors, who had outright told Congress that if they didn't get the cuts there would be no more donation. The middle class was told this was a big gift for THEM...BS

And I think it important to remember that all of these advantages for middle class people are very very temporary. Corporations and the very wealthy have permanent tax relief. The debt that will follow will cause entitlement programs to be cut. That has always been Paul Ryan's aim. And he has convinced many people that their roughly $300 savings is worth all this.
 
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JMR said:
I see the final plan includes the medical deduction. That was a late change, which I am glad for. Now tell me you found where the property tax deduction is still a go...over $10,000 of course.

And I think it important to remember that all of these advantages for middle class people are very very temporary.
Click to expand...

The bush tax cuts were temporary

Sorry the property tax deduction is capped at 10k and interest deductions only for mortgages of 750k or less
 
Crovax said:
The bush tax cuts were temporary

Sorry the property tax deduction is capped at 10k and interest deductions only for mortgages of 750k or less
Click to expand...

Who decided that property taxes over $10,000 (which we have to thank Susan Collins for that small concession) are excessive, but interest on mortgages of 750K should be deductible?
 
beerftw said:
Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
Click to expand...

If the dependent live at home is 19 years old or younger you can claim them as a dependent for the personal exemption credit . If the dependent is younger than 26 years old and a college student you can claim them as a dependent for the Personal exemption credit under all tax years but not in the GOP tax plan.
 
beerftw said:
Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
Click to expand...

Not only that, since when are progressives angry about tax increases for middle class and wealthy people? Over the past few weeks, all I hear in the media are examples such as: "A family making $74,000 will only save about $150 per month"! As if having an $1800 at the end of the year is a BAD thing! That's been the basic progressive line for 3 weeks, either "it's only a tax cut for the rich", or "lower income and middle class folks won't get a huge amount of money back". It's funny how inconsistent the claims have been!

But one thing we know is VERY consistent: when democrats in states like mine, raise everyone's property taxes by 35% all at once just 2 years ago, after allowing our power company to raise rates 50% all at once in 2007, just before the recession, NOBODY in the local media bitched about it, nor did local progressives for the most part! When dems raise taxes, fees, energy costs for everyone in blue states like Ca and NY, making it MUCH more expensive for the lower middle class and poor to get by, normally progressives are fully supportive, don't complain, and look the other way.

So forgive me if, A). I don't accept this as true, and B). I don't believe the feigned outrage.
 
beerftw said:
Wait you mean you could claim 18 year old children before the trump tax plan but not after????????????????? Why is an 18 year old counted as a child for tax purposed to begin with????!!!!!!
Click to expand...

The bigger question is why how or upon who one later spends their income matters at all. The income tax should apply equally based on income alone. Even the "standard" deduction is not standard - it varies based on whether the filer is married and is optional if you can exceed it with other deductions, again, based on how and upon who the income was later spent.
 
cpwill said:
Apparently he's hinging this on the large number of American's whose only dependents are older than 17 but younger than 18, and claiming that they count under current rules, but not under new ones?

No idea where he's counting the 18 year old, however, unless he is assuming he's in college, in which case they can claim some pretty major college deductions, and aren't likely to be using the standard.
Click to expand...

The purpose of this scenario is to demonstrate how the Personal exemption plays a huge role in many families Taxes . Consider this, the tax plan is a ten year program. How many families children will be over 17 during the life of this GOP tax plan. In order to be eligible for the CHILD TAX credit which the GOP plan raises from $1,000.00 to $2000.00 per child, the child must be under 17. The CHILD TAX CREDIT is the only other instrument available to off set your total taxes when you choose not to ITEMIZE. The personal exemption has been eliminated by the GOP tax plan. But in 2018 before the GOP tax plan the Personal EXEMPTION would have been $4150.00 per dependent and the tax filer. A dependent is qualified as a dependent if you support them and are under 19 for a non student and are under 26 for a college student. In my scenario The head of house hold,wife and two children all get the credit thus reducing their gross by $16,600 for the exemption alone. Plus they get and additional $13,000 for the standard deduction so the two together reduces their original gross of $60,000 by $29,600 leaving only $30,400.00 of taxable income.
 
JMR said:
Please elaborate on the college deductions. I am under the impression that they have been eliminated.
GOP Tax Bill: What Will Change for Students | Money
Click to expand...

Yes I think your right under the GOP plan but I was comparing what would have been 2018 taxes to the GOP tax plan. In 2018 I was referencing a deduction called the Personal Exemption which applies to the head of house hold, wife and children who are considered dependent by tax code guide lines of which their age must be under 19 for a non student and 26 for a student. The GOP plan eliminated the personal exemption, thus this was the purpose of the comparison. In 2018 the personal Exemption credit was $4150 per eligible person in the house hold. This scenario had four eligible person thus they can claim a deduction of $16,600.00 for this credit alone. Not chump change. Consider this, this credit definitely applies to a lot of families. The GOP plan raised the Child Tax Credit from $1,000.00 to $2,000.00 per child under the age of 17. The GOP boasted how this increase would off set the elimination of the personal exemption when coupled with the GOP plan to increase the Standard Deduction from $13,000.00 to $24,000.00. Indeed it does. But once the child is over 17 the child tax credit no longer applies . This is a ten year plan,many who can use the child tax credit now will loose that benefit but the personal exemption would always apply for the husband and wife and until 19 or 26 for dependent children . The math in my scenario shows that the GOP plan comes up short when the Child Tax credit no longer applies.
 
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