Author Topic: Trump-Republican tax plan, Bad for large families  (Read 138415 times)

Offline EJB

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Re: Trump-Republican tax plan bad for large families
« Reply #680 on: December 18, 2017, 06:46:24 PM »
That is correct (apparently the conference was following this thread  ??? )
It appears you would be able to pay your real estate tax due in the beginning of 2018 in December 2017 (as long as the tax has already been assessed - meaning you couldn't pre pay the following years property tax)

Can we revisit this? Can you prepay property tax? The language of bill seems to only restrict prepaying income tax, no?

Online skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #681 on: December 18, 2017, 07:05:18 PM »

I read that. But it didn't sound like the suggestion was to 'make state tax a charitable deduction' on any level. There's apparently an existing way to make a 'charitable' donation to the state that is qualifies for the federal tax deduction. What they'd be adding is that those donations to the state would qualify you for state income tax credit of the same amount. Thus you get to deduct an amount equivalent to your state income taxes from your federal taxes, and your 'donation' causes you to have a net zero tax liability. That's the way I understood it at least, and that would have nothing to do with any other types of charitable donations.

Online aygart

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Re: Trump-Republican tax plan bad for large families
« Reply #682 on: December 18, 2017, 07:09:18 PM »
I read that. But it didn't sound like the suggestion was to 'make state tax a charitable deduction' on any level. There's apparently an existing way to make a 'charitable' donation to the state that is qualifies for the federal tax deduction. What they'd be adding is that those donations to the state would qualify you for state income tax credit of the same amount. Thus you get to deduct an amount equivalent to your state income taxes from your federal taxes, and your 'donation' causes you to have a net zero tax liability. That's the way I understood it at least, and that would have nothing to do with any other types of charitable donations.
So if it is a charitable donation to the state it should be able to expense from a corp.
Feelings don't care about your facts

Offline CPA

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Re: Trump-Republican tax plan bad for large families
« Reply #683 on: December 18, 2017, 07:34:13 PM »
Can we revisit this? Can you prepay property tax? The language of bill seems to only restrict prepaying income tax, no?
I take back what I said which I took from an accounting blog. The language is vague and seems to say you only can't prepay state or local income tax.
"The conference agreement also provides that, in the case of an amount paid in a taxable
year beginning before January 1, 2018, with respect to a State or local income tax imposed for a
taxable year beginning after December 31, 2017, the payment shall be treated as paid on the last
day of the taxable year for which such tax is so imposed for purposes of applying the provision
limiting the dollar amount of the deduction. Thus, under the provision, an individual may not
claim an itemized deduction in 2017 on a pre-payment of income tax for a future taxable year in
order to avoid the dollar limitation applicable for taxable years beginning after 2017."

Offline EJB

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Re: Trump-Republican tax plan bad for large families
« Reply #684 on: December 18, 2017, 07:41:32 PM »
I take back what I said which I took from an accounting blog. The language is vague and seems to say you only can't prepay state or local income tax.
"The conference agreement also provides that, in the case of an amount paid in a taxable
year beginning before January 1, 2018, with respect to a State or local income tax imposed for a
taxable year beginning after December 31, 2017, the payment shall be treated as paid on the last
day of the taxable year for which such tax is so imposed for purposes of applying the provision
limiting the dollar amount of the deduction. Thus, under the provision, an individual may not
claim an itemized deduction in 2017 on a pre-payment of income tax for a future taxable year in
order to avoid the dollar limitation applicable for taxable years beginning after 2017."
So if I prepay property tax will that likely be deductible in 2017?

Online skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #685 on: December 18, 2017, 07:43:29 PM »
So if it is a charitable donation to the state it should be able to expense from a corp.
I don't know the details here, but if they can currently deduct/expense SALT, what would they gain with this workaround over today's tax law. And if they can't, then why would the state extend the tax credit to corps - they can just make it available to individuals. The whole point is to replace the SALT deduction, so the credit can be targeted for any situation where there was previously a SALT deduction, and now there isn't under the new bill.

Online aygart

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Re: Trump-Republican tax plan bad for large families
« Reply #686 on: December 18, 2017, 07:51:36 PM »
I don't know the details here, but if they can currently deduct/expense SALT, what would they gain with this workaround over today's tax law. And if they can't, then why would the state extend the tax credit to corps - they can just make it available to individuals. The whole point is to replace the SALT deduction, so the credit can be targeted for any situation where there was previously a SALT deduction, and now there isn't under the new bill.
Expensing can be better than a deduction. It comes off of AGI.
Feelings don't care about your facts

Offline Baruch

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Re: Trump-Republican tax plan bad for large families
« Reply #687 on: December 18, 2017, 09:09:59 PM »
Source please
Refundable always meant 15% of income over 3k.
All the news reports were that they made 1400 refundable.
If the percentage changed from 15% to 100% that would be a much bigger story, (1000 to 1400 is a 40% change. 15% to 100% is a 666% percent change, 666 is 16.65 times 40, so the story would be the percent change, not the 1400 change).

I can't bring a negative source, because that is impossible.
You will have to bring a positive source that the largest welfare program in decades was just created.

Offline mr12

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Re: Trump-Republican tax plan bad for large families
« Reply #688 on: December 18, 2017, 09:19:42 PM »
Refundable always meant 15% of income over 3k.
All the news reports were that they made 1400 refundable.
If the percentage changed from 15% to 100% that would be a much bigger story, (1000 to 1400 is a 40% change. 15% to 100% is a 666% percent change, 666 is 16.65 times 40, so the story would be the percent change, not the 1400 change).

I can't bring a negative source, because that is impossible.
You will have to bring a positive source that the largest welfare program in decades was just created.
according to this peice, 15% is only mentioned under old bill. Wouldn't be a larger handout than EITC, anyway.
https://www.nytimes.com/interactive/2017/12/15/us/politics/final-republican-tax-bill-cuts.html

Offline shapsam

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Re: Trump-Republican tax plan bad for large families
« Reply #689 on: December 18, 2017, 09:46:01 PM »
according to this peice, 15% is only mentioned under old bill. Wouldn't be a larger handout than EITC, anyway.
https://www.nytimes.com/interactive/2017/12/15/us/politics/final-republican-tax-bill-cuts.html
So what is "up to" $1400?

Offline Baruch

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Re: Trump-Republican tax plan bad for large families
« Reply #690 on: December 18, 2017, 09:46:25 PM »
according to this peice, 15% is only mentioned under old bill. Wouldn't be a larger handout than EITC, anyway.
https://www.nytimes.com/interactive/2017/12/15/us/politics/final-republican-tax-bill-cuts.html
It does slightly seem from that chart as you say.


A family of 4 children earning 20k, in the old bill would get 2,550, and in the new bill would get 5,600? I find that hard to believe.

If this is true this would be the greatest news for large familes ever. A family of 8 children earning 20k would get 11,200 instead of 2,550.

I hope you're right. But it sounds pretty crazy to think that there would be no stress on this fact AT ALL in the media.

Offline Baruch

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Re: Trump-Republican tax plan bad for large families
« Reply #691 on: December 18, 2017, 09:47:43 PM »
So what is "up to" $1400?
Great point!

Offline CPA

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Re: Trump-Republican tax plan bad for large families
« Reply #692 on: December 18, 2017, 09:48:20 PM »
according to this peice, 15% is only mentioned under old bill. Wouldn't be a larger handout than EITC, anyway.
https://www.nytimes.com/interactive/2017/12/15/us/politics/final-republican-tax-bill-cuts.html
"The credit is allowable against both the regular tax and the alternative minimum tax
(“AMT”). To the extent the child credit exceeds the taxpayer’s tax liability, the taxpayer is
eligible for a refundable credit (the “additional child tax credit”) equal to 15 percent of earned
income in excess of $3,000 (the “earned income” formula)."

This part of the law was not changed.

Offline churnbabychurn

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Re: Trump-Republican tax plan bad for large families
« Reply #693 on: December 18, 2017, 09:49:33 PM »
"The credit is allowable against both the regular tax and the alternative minimum tax
(“AMT”). To the extent the child credit exceeds the taxpayer’s tax liability, the taxpayer is
eligible for a refundable credit (the “additional child tax credit”) equal to 15 percent of earned
income in excess of $3,000 (the “earned income” formula)."

This part of the law was not changed.
Right, that's why it's not news..

Offline Baruch

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Re: Trump-Republican tax plan bad for large families
« Reply #694 on: December 18, 2017, 09:51:27 PM »
Thanks. 2 CPAs are backin me up!

Offline mr12

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Re: Trump-Republican tax plan bad for large families
« Reply #695 on: December 18, 2017, 09:56:34 PM »
"The credit is allowable against both the regular tax and the alternative minimum tax
(“AMT”). To the extent the child credit exceeds the taxpayer’s tax liability, the taxpayer is
eligible for a refundable credit (the “additional child tax credit”) equal to 15 percent of earned
income in excess of $3,000 (the “earned income” formula)."

This part of the law was not changed.
Only mention of earned income formula is in house version. Conference agreement says nothing about it.

Offline mr12

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Re: Trump-Republican tax plan bad for large families
« Reply #696 on: December 18, 2017, 10:51:07 PM »
http://taxplancalculator.com/calc
Running some numbers through this calculator seems to indicate refundable CTC is 15% above 2500. Not sure where he gets that from.

Offline CPA

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Re: Trump-Republican tax plan bad for large families
« Reply #697 on: December 18, 2017, 10:55:43 PM »
Only mention of earned income formula is in house version. Conference agreement says nothing about it.
What i quoted was from the current law. The conference agreement does not mention, which means it has not changed. If there was a change it would have said so.

Offline yitzf

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Re: Trump-Republican tax plan bad for large families
« Reply #698 on: December 18, 2017, 10:59:23 PM »
The text of the final bill page 55 here says they are lowering the base from 3k to 2.5k, but in the summary (page 566) it only says the the Senate bill lowered it but doesn't mention that it was agreed to in conference...
Quote from:
‘‘(6) EARNED INCOME THRESHOLD FOR REFUNDABLE CREDIT.—Subsection (d)(1)(B)(i) shall be applied by substituting ‘$2,500’ for ‘$3,000’.

Offline yitzf

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