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Subject: "Question about 2018 Taxes: Standard Deduction goes to $12,000?" Previous topic | Next topic
handle
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Wed Jun-13-18 11:51 AM

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"Question about 2018 Taxes: Standard Deduction goes to $12,000?"
Wed Jun-13-18 11:54 AM by handle

          

2017:The standard deduction for single taxpayers and married couples filing separately is $6,350 in 2017.

2018: The standard deduction amounts will increase to $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly and surviving spouses.

So right now I have a mortgage where the interest payments are $7400 a year. My taxes on it are $2400 a year. That totals $9800 a year. I have less (on average) less than $2200 in other deductions a year. (My state income tax is a different situation - we can pretend it's 0 right now.)

So I itemize.

But if I'm reading this correctly my tax advantage for my modest condo will be wiped out next year - am I reading this correctly?

I could , in theory, pay off the mortgage and not see any disadvantage tax wise (assuming no other changes.)

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Topic Outline
Subject Author Message Date ID
I had the same interpretation. I'm getting screwed royally in this
Jun 13th 2018
1
it sucks for folks that live in places with high RE prices
Jun 13th 2018
2
exactly!
Jun 13th 2018
3
Is your overall tax bill lower?
Jun 13th 2018
4
      RE: Is your overall tax bill lower?
Jun 13th 2018
5
           No doubt
Jun 13th 2018
6
                Mortgage deduction
Jun 13th 2018
7
                Not true. "Well off" as defined by the tax code in America is very unbal...
Jun 14th 2018
8
                     "Well off' is a state of mind
Jun 14th 2018
9
                     In order to move you have to have a job lined up...it's a catch 22..
Jun 14th 2018
10
                          shit.. I been peaking at Maryland but this shit scares me
Jun 14th 2018
14
                     Let me explain what I mean. Tale of two homeowners in the same location
Jun 14th 2018
11
                     Income is an incomplete measure of wealth anyway
Jun 14th 2018
12
                          MAN..I don't disagree with y'all...all EYE know is..my tax situation is ...
Jun 14th 2018
13
it's because there's no personal exemptions for 2018.
Jun 14th 2018
15

FLUIDJ
Member since Sep 18th 2002
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Wed Jun-13-18 11:58 AM

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1. "I had the same interpretation. I'm getting screwed royally in this "
In response to Reply # 0


  

          

We itemize...and a $24K standard deduction is a fraction of our itemized deductions when you factor in real estate.
But they pushing this shit like it's a win win for everyone.
It's not...not by any stretch of the imagination.

>2017:The standard deduction for single taxpayers and married
>couples filing separately is $6,350 in 2017.
>
>2018: The standard deduction amounts will increase to $12,000
>for individuals, $18,000 for heads of household, and $24,000
>for married couples filing jointly and surviving spouses.
>
>So right now I have a mortgage where the interest payments are
>$7400 a year. My taxes on it are $2400 a year. That totals
>$9800 a year. I have less (on average) less than $2200 in
>other deductions a year. (My state income tax is a different
>situation - we can pretend it's 0 right now.)
>
>So I itemize.
>
>But if I'm reading this correctly my tax advantage for my
>modest condo will be wiped out next year - am I reading this
>correctly?
>
>I could , in theory, pay off the mortgage and not see any
>disadvantage tax wise (assuming no other changes.)
>


"Get ready....for your blessing....."

  

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Cocobrotha2
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Wed Jun-13-18 01:36 PM

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2. "it sucks for folks that live in places with high RE prices"
In response to Reply # 1


          

We were going to try to pre-pay our RE taxes for this year but the county wasn't clear on whether they'd credit it properly.

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FLUIDJ
Member since Sep 18th 2002
39539 posts
Wed Jun-13-18 01:44 PM

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3. "exactly! "
In response to Reply # 2


  

          


"Get ready....for your blessing....."

  

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PimpTrickGangstaClik
Member since Oct 06th 2005
13475 posts
Wed Jun-13-18 01:57 PM

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4. "Is your overall tax bill lower?"
In response to Reply # 1
Wed Jun-13-18 01:59 PM by PimpTrickGangstaClik

  

          

I'm no longer going to itemize. But that's cool with me. The new standard deduction is much higher than all my itemized stuff.

_______________________________________
You ain't the only one whose got problems. You ain't the only one who knows pain. Get up off your ass and just solve them. You still got a chance to try to change, try the shit again.
Devin tha Dude

  

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handle
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Wed Jun-13-18 02:16 PM

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5. "RE: Is your overall tax bill lower?"
In response to Reply # 4


          

>I'm no longer going to itemize. But that's cool with me. The
>new standard deduction is much higher than all my itemized
>stuff.
Well, it takes away the advantage of owning a lower price house - the fuckers will million dollar houses (and mortgages) are still getting the benefits. Except strangely not the property taxes.

These changes hurt the people in the middle more than the low end or the high end.

------------
My prayers have been answered!

Gone
My Discogs collection for The Roots:
http://www.discogs.com/user/tomhayes-roots/collection

  

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PimpTrickGangstaClik
Member since Oct 06th 2005
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Wed Jun-13-18 02:24 PM

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6. "No doubt"
In response to Reply # 5


  

          

I can't complain that my tax bill has decreased. But the game definitely got more unfair.

If we're being really real, the mortgage deduction is/was unfair all together.

It was a tax break only for those that can itemize. Who can itemize? For the most part, only those who are pretty well off

_______________________________________
You ain't the only one whose got problems. You ain't the only one who knows pain. Get up off your ass and just solve them. You still got a chance to try to change, try the shit again.
Devin tha Dude

  

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handle
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Wed Jun-13-18 05:30 PM

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7. "Mortgage deduction"
In response to Reply # 6


          

>If we're being really real, the mortgage deduction is/was
>unfair all together.

Well this is becuase part of the old "American Dream' was to own a house and this evened out the interest penalty of trying to buy a house. Wasn't long ago that a "good rate" was 6.5% - and that was a penalty on people trying to buy a house.

And remember there's property tax increases each time a property is sold at a higher price so it benefits the (local) government sometimes too.

So "unfair" in one sense - but understandable in another.

The really poor get fucked in any case.


>It was a tax break only for those that can itemize. Who can
>itemize? For the most part, only those who are pretty well
>off

------------
My prayers have been answered!

Gone
My Discogs collection for The Roots:
http://www.discogs.com/user/tomhayes-roots/collection

  

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FLUIDJ
Member since Sep 18th 2002
39539 posts
Thu Jun-14-18 06:09 AM

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8. "Not true. "Well off" as defined by the tax code in America is very unbal..."
In response to Reply # 6


  

          

It doesn't account for so many factors...
Our household income is over $200K yes....
So according to the tax code we're "wealthy"?
That doesn't take into account the following:
-We live in one of THE most expensive regions of the country because this is where the job opportunities were in our field of study. To own a home in this region is dumb expensive. So a HUGE chunk of our income goes to just owning a home...
-We have two kids. HUGE expense in daycare alone. And because of our income, the dependent deduction is negated.
-Student loan debt
-Cost of living in this EXPENSIVE region.

So our $200k here is the equiv. of maybe $80K somewhere like say N.C. It's good yes....but it's hardly wealthy.

The middle class stay getting screwed over basically.

  

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handle
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Thu Jun-14-18 12:33 PM

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9. ""Well off' is a state of mind"
In response to Reply # 8


          

Income is an absolute.

Cost of living + psychological comfortableness don't have anything to do with the tax code

200k+ is a lot of income based on what people actually earn in the U.S.

Now, if you have expenses that overwhelm that then you have to change your spending habits.

Note:I live in San Diego - the only way to change spending habits is to move.

------------
My prayers have been answered!

Gone
My Discogs collection for The Roots:
http://www.discogs.com/user/tomhayes-roots/collection

  

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FLUIDJ
Member since Sep 18th 2002
39539 posts
Thu Jun-14-18 12:41 PM

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10. "In order to move you have to have a job lined up...it's a catch 22.."
In response to Reply # 9


  

          

Moving to a cheaper region of the country = losing current job & current pay
Moving to a "cheaper" location within the region = higher commuting and incidental expenses = no change in expenses...just a shift & likely a lower quality of life.

>Income is an absolute.
>
>Cost of living + psychological comfortableness don't have
>anything to do with the tax code

i will be paying more money in taxes next year as a direct result of the change. That will directly affect my cost of living and our psychological "comfort" for sure.

>200k+ is a lot of income based on what people actually earn in
>the U.S.
>
>Now, if you have expenses that overwhelm that then you have to
>change your spending habits.
>
>Note:I live in San Diego - the only way to change spending
>habits is to move.


"Get ready....for your blessing....."

  

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legsdiamond
Member since May 05th 2011
55596 posts
Thu Jun-14-18 01:32 PM

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14. "shit.. I been peaking at Maryland but this shit scares me"
In response to Reply # 10


          

need to find a place to settle before these kids start school.

prolly need to keep our asses right in Charlotte.

shut up already, damn

  

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PimpTrickGangstaClik
Member since Oct 06th 2005
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Thu Jun-14-18 12:50 PM

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11. "Let me explain what I mean. Tale of two homeowners in the same location"
In response to Reply # 8
Thu Jun-14-18 12:52 PM by PimpTrickGangstaClik

  

          

2017 tax code.

Blue collar worker. $50,000 income. Buys $125,000 house. 5% interest rate
White collar worker. $180,000 income. Buys $400,000 house. 5% interest rate.

Everything else about these two people is identical. Same number of kids, same location, everything is the same.

They are both paying interest on their homes. But who is able to use that interest expense to reduce their tax bills? The one who able to buy the more expensive home (white collar worker).

Blue collar worker has mortgage interest expenses ($6250), but it isn't high enough to overtake the standard deduction, so it is not in her favor to itemize. So even though she is a home owner, there is no tax benefit for her.

White collar worker has much higher interest expense ($20,000). This is much larger than the standard deduction, so she is able to benefit from the mortgage interest deduction.

How is it even the least bit fair that these two people are doing the exact same thing (owning a home). But the benefit that comes from that flows only to those wealthy enough to buy expensive homes?

Literally the more wealth you have, the more the government will subsidize you.

_______________________________________
You ain't the only one whose got problems. You ain't the only one who knows pain. Get up off your ass and just solve them. You still got a chance to try to change, try the shit again.
Devin tha Dude

  

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Cocobrotha2
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Thu Jun-14-18 01:00 PM

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12. "Income is an incomplete measure of wealth anyway"
In response to Reply # 8


          

Source of income is the real determinant.

Someone who makes 100k from dividends and interest is likely wealthier than someone who makes 250k on a W2 but the person living off of their assets will get taxed less.

I wouldn't say the tax code punishes the middle class but it does favor investors over wage earners.

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FLUIDJ
Member since Sep 18th 2002
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Thu Jun-14-18 01:14 PM

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13. "MAN..I don't disagree with y'all...all EYE know is..my tax situation is ..."
In response to Reply # 12


  

          

to be jacked up in 2019...
all that technical mumbo jumbo aside...
lol...

"Get ready....for your blessing....."

  

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PROMO
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Thu Jun-14-18 06:17 PM

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15. "it's because there's no personal exemptions for 2018."
In response to Reply # 0
Thu Jun-14-18 06:20 PM by PROMO

  

          

so, you don't get 3.5-4 racks (whatever the amount was) for you, your wife, your kids, etc.

edit: Trump sittin back like "got 'eem!"

STAND OUT HAND OUTS: http://basquiatwhenipaint.tumblr.com

TWEET ME: @PROMO206

  

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