The TAX CUT - How you plan to spent it
Next month many of us who work full time will see their paychecks get fatter due to the changes in federal tax rates. I'm sure some may contribute more to a Roth or Traditional IRA for example. Also, some may get bigger tax refunds for 2018 taxes and later years because of the doubling of the standard deduction. What are your plans starting in February?
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Possible uses:
Donate it to a sh*thole country Send Bernie Sanders a bag of dicks through the mail Invest it in my brokerage account
I would pitch into sending Bernie Sanders a bag of dicks
+1
pay yourself first, go ahead and increase your contributions to 401k, IRA, and brokerage accts. if you never see the money, you'll never miss it
Especially the next 2-4 years will be a great time to be in the market. I don't spend much, just on hookers and frosted flakes. Invest, save and find investments to shelter myself on taxes.
I’m not expecting it to be a noticeable amount. Then again, I actually have no idea how much I actually receive every couple of weeks in the bank as I never look and my wife takes care of our personal finances.
This sort of trust in your wife. We are all envious.
Many of us are unable to handle this kind of daily volatility of our net worth based on the mood she is in.
Good stuff.
Gonna get fucked at the end of the year from losing SALT deduction. So nothing.
I actually didn't really think about it until recently, ha. I noticed the other day that there was a 3 dollar deduction in my most recent deposits, which apparently turned out to be the paid family leave deduction based on what I was told.
It's not going to be a particularly meaningful number for me, but it's probably going straight to my 401k. It's as good as found money, which may be useful down the line.
To tell my ex wife to stop buying her new boyfriend scratch offs and King Cobra's with my alimony money.
Cyyyypppppptooooooo
I second this, basically free money. high risk and high reward. I just graduated college so once I started full time I stopped contributing to my 401K and not set that money aside in crypto every two weeks.
What?
I think most of you seem to be underestimating the tax cut. It should be pretty meaningful for most people on here except for the high school and college kids. See this tax bill calculator from the NYT as a back of the envelope guesstimate:
https://www.nytimes.com/interactive/2017/12/17/upshot/tax-calculator.ht…
Yeah, my cut is huge and I'm in a high tax state.
I think I will actually pay more in taxes. SALT deduction has screwed me. Heard states are working on a workaround.
I've upped my 401k contributions to buy into a rising stock market fueled by a lower corporate tax rate. So, for me it's more indirect rather than using my additional $1,000/year for something in particular.
What tax cut?
If you are even marginally successful in California (or NY, CT, NJ, etc), you will be paying more in taxes starting in 2018 due to the cap of $10,000 for SALT.
I looked at my 2016 returns, and between property taxes and state income taxes, I was able to deduct $24,000. Now that is capped at $10,000 - so I will be losing out on $12,000 in deductions. Run that at the Fed rate of 25% - just increased my taxes by $3,000.
I still will itemize due to mortgage interest and charitable contributions which will push me above the increased standard deduction - but I am going to take a hit.
Also, I can no longer deduct interest from my HELOC (2nd D/T) - which I deducted about $2,300 this year. With Trump being such a R/E guy - I am not sure why he felt it necessary to really punish home owners. The lowering of the mortgage amount down to $750,000 wont do us in high R/E value states any favors either.
All in all, I don't blame Trump for doing what he did - and that is sticking it to the uber liberal blue states that staunchly voted against him for the presidency. Just sucks being a Trump fan and a conservative in California as I am collateral damage.
Whatever though. Seems like it gave the market some legs and if my bank is seeing huge expense savings from the corporate tax cut (after we work our way through the hit of unwinding our deferred tax asset) - maybe they will think to give me a bigger raise and bonus that they previously were going to do, so hopefully it all washes out.
Good. These were the most asinine tax deductions of all time. That you could deduct HELOC interest was a loophole in the tax law that was never closed 40 years ago. You used to be able to write off pretty much all interest paid on your taxes, including consumer interest (e.g. credit card interest, car loan interest). These HELOCs are just another form of consumer credit and there's absolutely no reason that it shouldn't be subject to the same laws as other consumer interest. The very fact that there was a cap ($100,000) on the size of the HELOC subject to tax deduction is in itself an admission by the law that HELOCs are just consumer loans in another form. This is the law finally correcting itself.
As far as the mortgage interest deduction, across the market of home buyers and owners, there is no "punishment." Housing prices are subject to supply and demand, which in itself is a function of supply of money. If there is less supply of money then there will be less demand for housing (i.e. a reduced willingness to pay a relatively higher number), which reduces the price point where supply equals demand. The mortgage interest deduction is just a subsidy that increases the cost of home acquisition. Finally, the mortgage interest deduction benefits, historically, have pretty much only gone to the upper middle class and upper classes since the standard deduction was higher than the interest deduction for most people around the country. In other words, a solid majority of homeowners didn't even benefit from the deduction.
Trump left a whole lot more on the table for items that will continue to benefit middle and upper class. Really benefit the wealthiest of families. Removal of the estate death tax, not closing the loophole on the carry being treated as capital gains for the PE guys, etc etc.
He really chose to hammer on the middle to upper middle class in the coastal (blue) states with what he did instead of going after the ultra wealthy.
And as I said - people living in the Mid-West or something like that where home values are significantly lower than the coastal states of course arent going to have as much interest to deduct. Which is why I said earlier, he is punishing the blue coastal states because home values and thus associated mortgages and interest will be way higher than Iowa or Nebraska.
So I fully disagree with you that removing those specific deductions was the thing to do.
2 girls at the same time
we got a winner.
Move any additional cash from paycheck into ROTH. Any dough at the end of the year will go to fund brides ROTH if mine is maxed. Keep living like nothing happened.
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