Under Trump's tax plan, my taxes will [edit] decrease

[MikeMike]

Due to the changes of tiers, my taxes will increase by 46% decrease

How is this a tax cut for anyone but the top 1%?

Edited for accuracy.

Perknose
Forum Director

 

[fskimospy]

Due to the changes of tiers, my taxes will increase by 46%.

How is this a tax cut for anyone but the top 1%?

How are you calculating 46%? That seems unlikely.

But yes, his tax cut as currently formulated is basically a huge giveaway to the ultra rich.

 

[MikeMike]

How are you calculating 46%? That seems unlikely.

But yes, his tax cut as currently formulated is basically a huge giveaway to the ultra rich.

Using these images:

CURRENT:

TRUMP:

If I take my current salary, my taxes raise from 28k to 41k.

 

[fskimospy]

Using these images:

If I take my current salary, my taxes raise from 28k to 41k.

What is your current salary if you don't mind me asking?

 

[MikeMike]

What is your current salary if you don't mind me asking?

125k in the bay area. so mid-level for the area.

 

[MomentsofSanity]

125k in the bay area. so mid-level for the area.

I'm assuming your calculating based on your income vs. the top tax rate only correct?

 

[fskimospy]

125k in the bay area. so mid-level for the area.

Ah I see, your mistake is that you are taxing your entire income at the 33% level but that's not how our tax brackets work.

What those tax brackets are signifying is that for your income of $125,000 (presuming single) the first $37,500 is taxed at 12%, your income from $37k to $112k is taxed at 25%, and your income exceeding $112k is taxed at 33%. Altogether from my quick back of the envelope calculation you'll actually pay about $2k less in taxes under this plan as formulated.

 

[NostaSeronx]

Um... hmm...no?
http://www.forbes.com/sites/kellyph...ions-exemption-amounts-and-more/#413ef758792e

These numbers and tax rates are those you’ll use to prepare your 2016 tax returns in 2017.

By the time Trump gets his tax plan in, his presidency will be over.

 

[vi edit]

From here:

http://www.npr.org/2016/11/13/501739277/who-benefits-from-donald-trumps-tax-plan

"A single parent who's earning $75,000 and has two school-age children, they would face a tax increase of over $2,400," Batchelder says. That's if they had no child-care deductions; the increase in taxes comes partly because the Trump plan eliminates the $4,000 exemption for each person in a household.

"A single parent with $50,000 in earnings, three school-age children and no child care costs would also face a tax increase of around $1,188."

"A married couple earning $75,000 with two children and $10,000 in child care expenses would see a 30 percent cut."

As a high earning, married couple with child care costs...I do okay under his plan. But single mothers/single income w/ kids and SINK's get totally fucked. Especially those mid-income earners in that $40k-$75k range.

 

[fskimospy]

The problem with Trump's tax plan is that basically people at the very bottom pay more and people at the very top pay way way way less. The people in the middle are relatively untouched, except of course for the massive hit to the federal treasury that will have to be made up through cuts to services, etc.

 

[Pens1566]

I don't think those charts are correct. His tax plan only has 3 tiers IIRC. 12%,25%,33%.

 

[MikeMike]

Ah I see, your mistake is that you are taxing your entire income at the 33% level but that's not how our tax brackets work.

What those tax brackets are signifying is that for your income of $125,000 (presuming single) the first $37,500 is taxed at 12%, your income from $37k to $112k is taxed at 25%, and your income exceeding $112k is taxed at 33%. Altogether from my quick back of the envelope calculation you'll actually pay about $2k less in taxes under this plan as formulated.

Is it? I can't find the detail on that. If it is, my taxes will decrease by $300.

 

[Cozarkian]

125k in the bay area. so mid-level for the area.

Then your new tax will be $27,990.21 (which is slightly less than the $28,036.75 under the old system.

That's assuming $125000 is your taxable income. If that is your gross, then you probably save even more.

 

[MomentsofSanity]

Is it? I can't find the detail on that. If it is, my taxes will decrease by $300.

Pretty sure it goes down just over 1600 if you're single no kids by my quick calculation.

 

[MikeMike]

Then your new tax will be $27,990.21 (which is slightly less than the $28,036.75 under the old system.

That's assuming $125000 is your taxable income. If that is your gross, then you probably save even more.

I just need to get a damn CPA so I can maximize my earnings... wonder if I can actually get a positive ROI from an accountant...

 

[Fanatical Meat]

Its way too early to say. Trump essentially lifted Jeb's tax plan and reduced all the rates.

This might be a good thing because his plan needs to be developed more and he doesn't seem too attached to what it is. Trump has released goals that he wants to meet.

 

[Cozarkian]

But yes, this appears to be basically a cut for people making $420K+

 

[Genx87]

Using these images:

CURRENT:

TRUMP:

If I take my current salary, my taxes raise from 28k to 41k.

Are you including the large increase in personal and family deduction?

 

[pauldun170]

From here:

http://www.npr.org/2016/11/13/501739277/who-benefits-from-donald-trumps-tax-plan

"A single parent who's earning $75,000 and has two school-age children, they would face a tax increase of over $2,400," Batchelder says. That's if they had no child-care deductions; the increase in taxes comes partly because the Trump plan eliminates the $4,000 exemption for each person in a household.

"A single parent with $50,000 in earnings, three school-age children and no child care costs would also face a tax increase of around $1,188."

"A married couple earning $75,000 with two children and $10,000 in child care expenses would see a 30 percent cut."

As a high earning, married couple with child care costs...I do okay under his plan. But single mothers/single income w/ kids and SINK's get totally fucked. Especially those mid-income earners in that $40k-$75k range.

Married, 2 kids single income....wife is stay at home so no daycare.
What I just got out of your post is that under Trump's plan, I can no longer claim my wife and kids as dependents since the individual deductions are eliminated (My tax bill goes up 12K)

HOWEVER I do recall reading somewhere that the standard deduction jumps from 12.5K to 30K (for Married filing joint) so after all is said and done I save.
maybe

I haven't done the deep dive in tax crap in awhile.
Our accountant handles all that crap

 

[momeNt]

ITT: A person earning $125,000 that doesn't understand tax brackets.

Please don't let your employer find this out.

I'm just saying.

 

[Genx87]

ITT: A person earning $125,000 that doesn't understand tax brackets.

Please don't let your employer find this out.

I'm just saying.

It is understandable, most of America, congress, Drumpf, and tax advisiors don't understand our tax code either.

 

[MikeMike]

Are you including the large increase in personal and family deduction?

Where can I find the details on that?

ITT: A person earning $125,000 that doesn't understand tax brackets.

Please don't let your employer find this out.

I'm just saying.

I would love to have the ability to spend time to figure out tax brackets and what not, but instead of doing that, I spent my time making myself valuable enough to get to 125 base under 30.
- It's also freaking insanely crazy to figure out plans when there are no details

 

[SP33Demon]

Yeah, was going to say there's no way it's even going up at your tax bracket. All brackets should be receiving cuts.

 

[momeNt]

Where can I find the details on that?



I would love to have the ability to spend time to figure out tax brackets and what not, but instead of doing that, I spent my time making myself valuable enough to get to 125 base under 30.
- It's also freaking insanely crazy to figure out plans when there are no details

https://www.donaldjtrump.com/policies/tax-plan

Quick down and dirty is you take your salary, apply the deduction, that's your adjusted gross income, then you apply the rates for each portion of the bracket that applies. If you are single, that 125k goes down to 110k, and none of your salary is taxed at 33%.

 

[Genx87]

I'm seeing the new deduction all over the place. I have seen it as low as 12,100 to as high as 25,000. But it is definitely going up from 6300 for single filers in 2016 under his plan. I think the goal is to get rid of schedule A for avg people. I am fine with that imo.