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Thread: Trump Supposed Tax Cuts

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    Default Trump Supposed Tax Cuts

    I continue to struggle to get my returns done, still too stubborn to hire an accountant and am using turbo tax instead. Anyhow, how drastically did the increase in the standard deduction change ppl's tax bracket? I'm seeing that the numbers are A LOT lower for me this year both on turbo tax, checked against H&R block, like a LOT lower. Yet, everyone is saying that Trump's tax overhaul has caused a tax increase. What is true?

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    Default Re: Trump Supposed Tax Cuts

    When you increase deductions and reduce tax rates, your total tax bill goes lower. This is what a vast majority of taxpayers experienced, including you apparently. Some of the major media outlets were briefly running with a very goofy story about lower tax returns, but that story quickly dried up when more data came out.

    The one notable exception is for those who itemize their deductions and pay a lot in state and local property taxes. The SALT deduction, which used to be unlimited, is now capped at $10,000. This has mainly affected affluent people in high tax states like CA, NY, NJ and CT. So let's say a wealthy person pays 75k per in state taxes and another 25k per year in property taxes. He used to be able to deduct the entire 100k from his taxable income. Now that he is limited to a 10k deduction, he has to pay federal taxes on 90k more, all at the highest applicable tax bracket for that person. For extremely wealthy people, these numbers get even significantly higher.

    If you are in one of those high tax states and work in the adult entertainment industry, this may be coloring what you hear. But anyone who itemizes deductions saw a tax cut, pure and simple. So too did a guy like me, who does itemize deductions but lives in a state with no state income taxes and very manageable property tax rates.

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    Default Re: Trump Supposed Tax Cuts

    The standard deduction being double than what it was, $12000, certainly helps but still, what I have seems awful low. So I guess I'll keep working on it.

    Wow, as far as those tax cuts, I guess Trump really did what he said he was going to do, even if it would be detrimental to someone as wealthy as him.

    Hopefully, I'll benefit as much as I'm thinking I might and not making mistakes.

    The one thing I did know is that he reduced your ability to deduct stuff you were previously able to deduct as a sole proprietor, with the aforementioned cap on itemized deductions being 10k. So basically, it forces you to formalize your business into a corporation (rather than a less formal sole proprietorship) if you want to continue being eligible to expense stuff.

    It's interesting how ppl misconstrue laws if they don't like them or the ppl making them, with Fosta/Sesta being another good example of how ppl blow it out of proportion about being this evil piece of legislature that's literally killing ppl left and right and also, the reclassification of dancers into employees all over CA (I personally don't think it's guaranteed to be as bad as ppl think).
    Last edited by ZeroSugarMonster; 03-14-2019 at 06:39 AM.

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