Author Topic: Trump-Republican tax plan, Bad for large families  (Read 138354 times)

Offline mr12

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Re: Trump-Republican tax plan bad for large families
« Reply #720 on: December 20, 2017, 12:52:05 AM »
I highly doubt it. If that were the case, what would that change to the federal tax code have accomplished at all?
To exempt the earnings from federal tax

Offline mr12

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Re: Trump-Republican tax plan bad for large families
« Reply #721 on: December 20, 2017, 12:56:43 AM »
 :D :o
Fwiu it's only out for homeschool

Unfortunately, I don't think that's correct. Sen. Wyden's comments seem to say that because this provision is more than just a budget issue, it cannot be passed through reconciliation. That would apply to private schools as well.

Offline skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #722 on: December 20, 2017, 01:08:34 AM »
To exempt the earnings from federal tax
Good point. I should probably go to bed. ;)

Though I still think that if it's in the bill that passes, the states can't say K-12 isn't a qualified withdrawal.

Offline Baruch

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Re: Trump-Republican tax plan bad for large families
« Reply #723 on: December 20, 2017, 01:17:32 AM »
Ted Cruz says in his speech that it's only been removed for homeschooling

Offline churnbabychurn

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Re: Trump-Republican tax plan bad for large families
« Reply #724 on: December 20, 2017, 07:34:01 AM »
Is SALT for business income on a schedule-C going to remain deductible?
Without knowing, I would assume so

Offline Deal Guy

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Re: Trump-Republican tax plan bad for large families
« Reply #725 on: December 20, 2017, 10:18:45 AM »
What is an example of salt on a schedule c?
Isn't salt, income tax which is something that is only calculated on your personal state tax return?

Offline aygart

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Re: Trump-Republican tax plan bad for large families
« Reply #726 on: December 20, 2017, 10:23:36 AM »
What is an example of salt on a schedule c?
Isn't salt, income tax which is something that is only calculated on your personal state tax return?
property tax
Feelings don't care about your facts

Offline thaber

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Re: Trump-Republican tax plan bad for large families
« Reply #727 on: December 20, 2017, 11:14:33 AM »
My understanding is that each state would have to make the change to their 529 plan for you to be able to use the funds for k - 12. Someone can correct me if I'm wromg
You're wrong. 529 plans grow tax free with after tax dollars. If you use the states plan (not every state has one), then they're exempt from state tax too.
I'm in CA, there is no CA plan, so I would find the 529 funds quirk the best returns and enjoy the federal tax benefits

Offline Deal Guy

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Re: Trump-Republican tax plan bad for large families
« Reply #728 on: December 20, 2017, 11:20:47 AM »
You're wrong. 529 plans grow tax free with after tax dollars. If you use the states plan (not every state has one), then they're exempt from state tax too.
I'm in CA, there is no CA plan, so I would find the 529 funds quirk the best returns and enjoy the federal tax benefits
I don't get what you wrote

Offline skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #729 on: December 20, 2017, 11:41:05 AM »
You're wrong. 529 plans grow tax free with after tax dollars. If you use the states plan (not every state has one), then they're exempt from state tax too.
I'm in CA, there is no CA plan, so I would find the 529 funds quirk the best returns and enjoy the federal tax benefits
CA actually has one of the best rated plans overall:
https://www.scholarshare.com/open/index.shtml

Depending on the exact details of how you want to invest, you might want to dig through the details at one of the many sites that reviews all the different plans, like this one: http://www.savingforcollege.com/5_cap_ratings/

Offline thaber

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Re: Trump-Republican tax plan bad for large families
« Reply #730 on: December 20, 2017, 11:43:14 AM »
CA actually has one of the best rated plans overall:
https://www.scholarshare.com/open/index.shtml

Depending on the exact details of how you want to invest, you might want to dig through the details at one of the many sites that reviews all the different plans, like this one: http://www.savingforcollege.com/5_cap_ratings/
I misspoke, meant to say that CA doesn't offer a deduction for contributions. Many states do

Offline ExGingi

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Re: Trump-Republican tax plan bad for large families
« Reply #731 on: December 20, 2017, 11:47:37 AM »
I misspoke, meant to say that CA doesn't offer a deduction for contributions. Many states do
Do states offer a deduction or a credit? Specifically asking about NY.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline thaber

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Re: Trump-Republican tax plan bad for large families
« Reply #732 on: December 20, 2017, 11:50:07 AM »
Do states offer a deduction or a credit? Specifically asking about NY.
In addition to federal tax benefits, many states offer full or partial state tax deductions for contributions to a 529 plan. ... Seven states currently have a state incometax, but do not offer a deduction for contributions: California, Delaware, Hawaii, Kentucky, Maine, New Jersey, and North Carolina.

Offline skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #733 on: December 20, 2017, 12:05:18 PM »
Do states offer a deduction or a credit? Specifically asking about NY.
NY's is a deduction.

ETA: Here's the full list, I posted it earlier on another thread:

http://webcache.googleusercontent.com/search?q=cache:BW5ULc57WuMJ:www.finaid.org/savings/state529deductions.phtml+&cd=3&hl=en&ct=clnk&gl=us

Only 3 have credits - UT, VT, and IN.

Offline CPA

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Re: Trump-Republican tax plan bad for large families
« Reply #734 on: December 20, 2017, 12:31:15 PM »
You're wrong. 529 plans grow tax free with after tax dollars. If you use the states plan (not every state has one), then they're exempt from state tax too.
I'm in CA, there is no CA plan, so I would find the 529 funds quirk the best returns and enjoy the federal tax benefits
Each state manages their own 529 plan. So if a state does not adopt the K-12 rule than a withdrawl from the plan may be a qualified withdrawl as per the IRS but an unqualified withdrawal per the state for state income tax purposes.

Offline yitzf

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Re: Trump-Republican tax plan bad for large families
« Reply #735 on: December 20, 2017, 12:34:39 PM »
Fwiu it's only out for homeschool

That is correct. 529 can still be used for regular K-12.

Offline skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #736 on: December 20, 2017, 12:41:12 PM »
Each state manages their own 529 plan. So if a state does not adopt the K-12 rule than a withdrawl from the plan may be a qualified withdrawl as per the IRS but an unqualified withdrawal per the state for state income tax purposes.
The deduction/credit is on the contribution, not the withdrawal. But even if that wasn't the case, what constitutes a qualified withdrawal is federally defined. There aren't separate rules for that for each state. CMIIW.

Offline CPA

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Re: Trump-Republican tax plan bad for large families
« Reply #737 on: December 20, 2017, 01:04:43 PM »
The deduction/credit is on the contribution, not the withdrawal. But even if that wasn't the case, what constitutes a qualified withdrawal is federally defined. There aren't separate rules for that for each state. CMIIW.
Not according to the State I just spoke to. Each state manages their own withdrawal rules. For example NYS treats a 529 rollover from a NYS 529 plan to another States 529 plan as a taxable withdrawal on any earnings and will recapture all NYS deductions associated with the rollover (the contributions).
https://www.nysaves.org/home/why-ny-529-direct-plan/tax-benefits.html

Offline thaber

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Re: Trump-Republican tax plan bad for large families
« Reply #738 on: December 20, 2017, 01:45:23 PM »
Not according to the State I just spoke to. Each state manages their own withdrawal rules. For example NYS treats a 529 rollover from a NYS 529 plan to another States 529 plan as a taxable withdrawal on any earnings and will recapture all NYS deductions associated with the rollover (the contributions).
https://www.nysaves.org/home/why-ny-529-direct-plan/tax-benefits.html
Let me give you an example. 5 years ago I started a 529 plan in Alaska, which has BH done very well. I pay no Alaska taxes, and if I withdraw to pay for school in CA then the gains will not be federally taxed. Regardless, they will be CA taxed.

Offline skyguy918

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Re: Trump-Republican tax plan bad for large families
« Reply #739 on: December 20, 2017, 02:05:10 PM »
Not according to the State I just spoke to. Each state manages their own withdrawal rules. For example NYS treats a 529 rollover from a NYS 529 plan to another States 529 plan as a taxable withdrawal on any earnings and will recapture all NYS deductions associated with the rollover (the contributions).
https://www.nysaves.org/home/why-ny-529-direct-plan/tax-benefits.html
Not that I don't believe you, but that link doesn't back up what you're saying. I'm a little surprised that NY (or any state for that matter) wouldn't have put out some sort of information pertaining to this if what you're saying is true.