|
nwiniwn posted:Gotcha-thanks. Correct, the W-4 system is kinda old at this point and treats “married” as one spouse in the home and one spouse working. Married but withhold at Single rate is kind of a patch on that. You don’t need to change it though, being “single” even when married isn’t a problem with the W-4 withholding, the IRS doesn’t really care so long as the money gets withheld right. Also minus student loan repayments (which are based on reported AGI) it is almost universally better to do MFJ rather than MFS, and none of your listed facts makes me suspect otherwise. I doubt you will be “screwed” in any event, if your withholding has remained constant.
|
#
?
Oct 21, 2017 17:17
|
|
|
|
| # ? Jun 1, 2024 05:09 |
|
|
All in one year: Contributed to a ROTH before realizing I would not be eligible. Withdrew excess contributions through broker. Then rolled over 100% pre-tax traditional IRA into Roth (taxable income) because future salary is likely to be in an even higher tax bracket. Now I want to backdoor ROTH, but I know I can only rollover once per year. Can I drop $11k in the traditional in early January for 2017 and 2018 IRA years and just rollover both years then in order to minimize potentially taxable gains? Edit: looks like conversions aren't limited from trad to roth, so I should be able to backdoor now? I guess I should have just contributed before rolling over, but in my mind the taxes would be easier to figure out this way. baquerd fucked around with this message at 16:11 on Oct 27, 2017 |
|
#
?
Oct 27, 2017 15:30
|
|
|
baquerd posted:All in one year: Contributed to a ROTH before realizing I would not be eligible. Withdrew excess contributions through broker. Then rolled over 100% pre-tax traditional IRA into Roth (taxable income) because future salary is likely to be in an even higher tax bracket. Rollovers are only limited if you do it personally (i.e. they pay you the money and you then put it in another retirement account), what’s called an indirect rollover. If the company(ies) running the accounts handle the rollover themselves it’s a direct rollover, and there’s no limit on how many of those you can do. You can rollover any amount, though your contributions per year are limited (you can still make a contribution by April 15th and have it count for last year though). Main things tax-wise to consider with backdoor Roth are to make sure you have no traditional IRAs with pretax money (otherwise some of what you flip to Roth has tax on it), use only after tax money for the contribution and don’t claim it as an adjustment, and do the contribution and rollover as close as possible to each other so there are no taxable earnings. Most companies that do backdoor Roth contributions will take care of the work for you on the rollover end. You do the conversion paperwork on Form 8606 when you do taxes.
|
|
#
?
Oct 27, 2017 21:15
|
|
|
MadDogMike posted:Sorry, not all of us created equal, yeah. Though honestly “find a good preparer” can be enough of a crapshoot anywhere I recommend if you do find one to hold on to them. Hey thanks for this! I was going to reply sooner but i didn't have the thread bookmarked but life got in the way. I am thinking that it might be better to just use the credit instead, since if I understand you correctly, any money I divert to a dependent care account counts against the credit calculation, and I think the credit at this point is more generous than the tax on the amount of income I would be needing to spend on childcare out of a dependent care account. I guess if my income increases and I am spending a LOT more in childcare I would revisit that.
|
|
#
?
Oct 28, 2017 03:44
|
|
|
I've been trying to find a simplistic explanation of my tax obligations, given the following situation: -I'm Canadian -I'm working in the US (transferred from Canadian employment to US employment on Jan 01) -No Canadian income this year, but I do have RRSPs So I have to file state, US federal, and Canadian taxes. Up to this point, my paycheck has had US withholdings (since I only now am realizing I could file an 8233, I think?). From what I can tell, my state and US taxes should be fairly straightforward since I have one income, no investments, no dependents. I need to file an FBAR for my Canadian accounts, but they don't total >$50k so I don't have to do an 8938. I would also have to file Canadian taxes using my US income. However, I can also include the US withholdings against whatever Canada would be calculating, meaning I would only end up owing the difference. I don't know how the conversion from USD to CAD factors in to that. I can/should also file an 8233 for 2018 to simplify(?) next year's taxes. Am I missing anything major? I think at least for the first year I'm going to look at hiring someone on the US side; Canadian taxes are easy enough as long as my assumptions are correct regarding US income and withholdings.
|
|
#
?
Nov 8, 2017 23:52
|
|
|
OK, can't really go into the whole thing over the Internet (and to be honest, I'd want to do research to boot, I keep handling more and more foreign-related tax stuff but I'm still not 100% on it, especially with all the various tax treaty stuff related to it and Canada has a ton as I recall). I guess the main thing I'd want to double check here is whether you merely work in the US (i.e. you commute across the border from Canada) or if you're actually residing in a US location. That affects your US tax filing a bunch, since the IRS doesn't care about immigration/visa type documentation (though green card = automatic resident) so much as presence in the US when determining your residency for tax purposes. You may have to also make up some money on the Canada tax return since they have a higher tax rate than the US if memory serves, so your credit will be limited by the amount of tax the US actually taxes you (for example, if a work location takes out 6% for taxes but your resident area has a 10% tax rate you need to make up the remaining 4%, you don't get a pass on paying the total tax needed so much as credit for what you actually paid someone else). If I can take your message as meaning you do work in the US but live in Canada though everything you have here seems pretty good at first glance. Again though I can't claim a lot of expertise here (being in the middle of the East Coast US means I have done very few 1040-NR returns and my only involvement with Canada was helping US citizens with Canadian income not vice versa), so take this with a grain of salt. Be very sure if you go for professional assistance (which I do definitely recommend) that you make it clear what your situation/problem is and that they understand US and Canada taxes. If you're on the border such experience undoubtedly is available, just make it clear when you're asking so you get somebody with it. I did find this site if you want a little info on the USD/CAD conversion rate to use and the form for claiming the tax credit in Canada (Schedule T2209 apparently).
|
|
#
?
Nov 12, 2017 04:37
|
|
|
I've been agonizing over this for a few days, so I thought I'd see if anyone here has any thoughts. I have a client who has been working overseas for a very long time and started a Roth IRA about ten years ago. This person takes the Foreign Earned Income Exclusion every year, so you probably already see the problem. Every single dollar in this decade old IRA is ineligible. Contributions for the last year have been withdrawn and no more contributions will be made, but I am not sure how to handle previous years. The obvious answer is to refile and pay all the penalties and taxes; that's thousands of dollars just in the excise tax. I'd hate to see this person lose a huge chunk of money because they tried to do the right thing and save for retirement. There are a number of expat advisers online claiming that if you decline the exclusion and use the Foreign Tax Credit on your entire income instead, this will make income available for contribution as it is technically now included in taxable income. It makes sense on a close reading, as it is not foreign income that is ineligible, but excluded income. However, I am not 100% confident in this strategy. I have seen some dissension on this point, and the IRS has been silent it seems. I would like to avoid option one, because they are going to lose half their retirement, and me or some other accountant is going to take a big bite out of what's left in refiling fees. If it is reasonable to go back and refile and those years using FTC, making the contributions retroactively eligible, of course that is the preferable course.
|
|
#
?
Nov 17, 2017 03:23
|
|
|
I have a terribly stupid question so please don't roast me too crispy: In the explainers about the proposed federal tax bill, they all say the plan is to eliminate the federal deductions for state and local taxes. They are proposing to eliminate the thing that prevents you from being effectively taxed twice on the same income, right? No, it's not a windup for some tax resister bullshit, I just want to make sure I'm not misunderstanding the mechanics.
|
|
#
?
Nov 19, 2017 18:42
|
|
|
NancyPants posted:I have a terribly stupid question so please don't roast me too crispy: That’s the way most people look at it (and I do too for selfish Jersey reasons), but that doesn’t automatically make it more logical. After all, if I pay for a product that costs $100 and has a 1% shipping fee and 6% sales tax, I’m paying that tax on 100, not on 99.
|
|
#
?
Nov 19, 2017 19:37
|
|
|
balancedbias posted:That’s the way most people look at it (and I do too for selfish Jersey reasons), but that doesn’t automatically make it more logical. After all, if I pay for a product that costs $100 and has a 1% shipping fee and 6% sales tax, I’m paying that tax on 100, not on 99. Oh, I always blow off tax resisters and SovCits who try to play the "sales tax is double taxation so I don't have to pay income tax OR sales tax" game. I'm not suggesting the proposed bill is inherently unconstitutional, I'm just trying to make sure I'm not missing something for my own understanding. Under the proposed law, the federal gov would tax you on your whole income less any other credits or deductions, but not give you credit for taxes paid to your state or locality as they do now, right? Are they actually trying to pass something that does what it says on the box? e: You're breaking my brain with this analogy, where's the $99 from? If it's $100 w/1% shipping fee you're paying sales tax on $101. BonerGhost fucked around with this message at 20:21 on Nov 19, 2017 |
|
#
?
Nov 19, 2017 20:11
|
|
|
NancyPants posted:I have a terribly stupid question so please don't roast me too crispy: You are taxed on the same income. You earn $100,000, you owe federal taxes of $30,000 and State taxes of $8000 on that $100,000 of income. Same income taxed twice. The deduction might reduce your income to $92,000, and that's reasonable since you never have the use of the $8000 in taxes you're paid the state, although your income really was $100,000 that year. Subsidizing state taxes is one of those things that benefits the federal government, so it's an entirely logical deduction, but it's not "to prevent you from being taxed twice on the same income".
|
|
#
?
Nov 19, 2017 21:35
|
|
|
sullat posted:Subsidizing state taxes is one of those things that benefits the federal government, so it's an entirely logical deduction, but it's not "to prevent you from being taxed twice on the same income". I agree with you on that, I just didn't articulate it at all clearly. sullat posted:The deduction might reduce your income to $92,000, and that's reasonable since you never have the use of the $8000 in taxes you're paid the state, although your income really was $100,000 that year. Under the proposed legislation, would you then pay federal taxes on $100,000 instead of $92,000 as you do now?
|
|
#
?
Nov 20, 2017 05:20
|
|
|
NancyPants posted:Under the proposed legislation, would you then pay federal taxes on $100,000 instead of $92,000 as you do now? Correct. Now you can take a schedule A deduction for state & local taxes. If they remove it, that gets tacked back on to taxable income. Under the earlier example, $100,000 in income leading to $8000 in state taxes, you still get taxed on the full $100,000. I'm guessing the property tax deduction is also being scuppered, but I haven't looked too closely into it.
|
|
#
?
Nov 20, 2017 06:44
|
|
|
sullat posted:Correct. Now you can take a schedule A deduction for state & local taxes. If they remove it, that gets tacked back on to taxable income. Under the earlier example, $100,000 in income leading to $8000 in state taxes, you still get taxed on the full $100,000. I'm guessing the property tax deduction is also being scuppered, but I haven't looked too closely into it. Ok, now I gotcha. Thanks for explaining for me. e: VVV see, that's what I was understanding. But I thought, "Nooo, that's too obviously bad, there must be something I'm missing, they can't honestly be proposing that. Why is no one who is breaking this down pointing out how hilariously bad and stupid this is?" so I assumed that I was just missing something that was right in my face (when I miss something it's usually because it's right in my face). BonerGhost fucked around with this message at 22:35 on Nov 20, 2017 |
|
#
?
Nov 20, 2017 07:07
|
|
|
To further clarify the plans, they are primarily talking about replacing the bucket of deductions you currently get with a new one. The theme is to create a new "standard deduction" that looks high but actually isn't, because they have also removed the personal exemption that everyone already gets without really talking about it. So an example: someone who has 200k in income in a 5% state, 2 kids, and a 500k mortgage. Now: $16k personal exemptions + $10k state tax + $13k property tax + $17k mortgage interest = $56k deductions, $144k taxable income House Plan: $10k capped property tax + $17k mortgage interest = $27k deductions, $173k taxable income Senate Plan: $17k mortgage interest is not higher than new $24k standard so $176k taxable income Also funny to note, when Trump first started talking about this the new standard deduction he used was $50k. Then it turned into $30k when they actually half-assed a "plan" for their campaign website. And now that we see the actual proposal it's all the way down to $24k.
|
|
#
?
Nov 20, 2017 17:14
|
|
|
Also note that head of household is going away under the plan, so they don’t double their current $9300 standard deduction but get the single person’s $12,000. This generally leaves single parents worse off thanks to that and the loss of exemptions, though in theory they’ve made adjustments to the child tax credit to compensate (note: will not compensate for anybody over lowest bracket and I believe the raised child tax credit is expiring pretty quick).
|
|
#
?
Nov 22, 2017 04:30
|
|
|
My wife just started a new job last month that doesn't withhold taxes (because they're a startup and hate labor laws, protections, and employee benefits) and will need to file quarterly taxes. I have a salaried job and expected to file a W4. We'll be filing jointly because we made IRA contributions this year. How should we handle quarterly tax payments filing jointly? I've had a surprisingly hard time getting info about this online. Are those handled separately and shuffled in during annual tax filing in April?
|
|
#
?
Nov 28, 2017 17:16
|
|
|
Spoderman posted:My wife just started a new job last month that doesn't withhold taxes (because they're a startup and hate labor laws, protections, and employee benefits) and will need to file quarterly taxes. I have a salaried job and expected to file a W4. We'll be filing jointly because we made IRA contributions this year. How should we handle quarterly tax payments filing jointly? I've had a surprisingly hard time getting info about this online. Are those handled separately and shuffled in during annual tax filing in April? There’s no special trick to making estimated payments “jointly”, you just make the payments under one of the spouses and it gets aggregated together when you file jointly just like multiple W-2s and everything else does. As for how to make estimated payments, check out Form 1040-ES for the instructions/form, or you can do it online at the IRS website if you prefer under the “Pay” option. Don’t forget to withhold enough to cover SE tax, there are several online calculators that’ll give the correct amount to pay with estimated tax payments (look for the ones labeled “self employment income”). Estimated tax payments happen throughout the year by April 15th, June 15th, September 15th, and January 15th of the following year. Also be aware she’ll need a Schedule C or C-EZ with the return. Her income should be reported on a 1099-MISC that gets sent out around the same time as other tax forms, keep track of any expenses you get out of pocket. EDIT - one other thing, make sure you make any estimated payments for the state as well, check the appropriate state dept. of revenue website for the info (many do online payments as well). MadDogMike fucked around with this message at 18:30 on Nov 28, 2017 |
|
#
?
Nov 28, 2017 18:28
|
|
|
MadDogMike posted:There’s no special trick to making estimated payments “jointly”, you just make the payments under one of the spouses and it gets aggregated together when you file jointly just like multiple W-2s and everything else does. As for how to make estimated payments, check out Form 1040-ES for the instructions/form, or you can do it online at the IRS website if you prefer under the “Pay” option. Don’t forget to withhold enough to cover SE tax, there are several online calculators that’ll give the correct amount to pay with estimated tax payments (look for the ones labeled “self employment income”). Estimated tax payments happen throughout the year by April 15th, June 15th, September 15th, and January 15th of the following year. Also be aware she’ll need a Schedule C or C-EZ with the return. Her income should be reported on a 1099-MISC that gets sent out around the same time as other tax forms, keep track of any expenses you get out of pocket. Thanks. I'll get on that.
|
|
#
?
Nov 28, 2017 18:45
|
|
|
I have a side business that is really going well this year, on track for about 30k net profits. I have a sep ira from last year that I put some cash in. Online calculators make it look lime I can save more in a solo 401k. So I am setting that up. Can I contribute to both a solo 401k and a sep ira in the same tax year?
|
|
#
?
Nov 28, 2017 22:52
|
|
|
sparkmaster posted:I have a side business that is really going well this year, on track for about 30k net profits. I have a sep ira from last year that I put some cash in. Online calculators make it look lime I can save more in a solo 401k. So I am setting that up. Looks like based on what I found here they do share the same $53,000 or so total limit. If your contributions to both are at/below that it’s OK, though as most sources note it’s not very efficient to do both since money into one automatically restricts money into the other. Check Pub 560 for more info.
|
|
#
?
Nov 28, 2017 23:49
|
|
|
Question on mortgage interest deduction for non-marrieds. We both own & live in the house. Both on the loan. I think we can split the interest deduction however we want IF we're both itemizing, but I'm guessing we can't have one person itemize and take 100% of the interest deduction and have the other person take the standard deduction. I know that wouldn't fly with MFS so I'm assuming it wouldn't in this situation either, but the tax code is dumb so who knows. The only other wrinkle is that it's kind of fair to say that I actually have been paying 100% of the interest, because she made 100% of the down payment and I've been making 100% of the monthly payments.
|
|
#
?
Nov 30, 2017 18:15
|
|
|
scrubs season six posted:Question on mortgage interest deduction for non-marrieds. It’s supposed to go to the person actually making the mortgage payments (who is thus paying the interest) though if it’s paid out of a joint account I suppose you could split it by saying it’s paid by both of you. You definitely don’t have a restriction like with MFS on who can itemize though, that ONLY applies to married couples. Unmarried couples can have one itemize and the other do standard without any issue.
|
|
#
?
Nov 30, 2017 18:23
|
|
|
Is there a thread somewhere discussing the ins and outs of the proposed tax law changes?
|
|
#
?
Dec 3, 2017 01:10
|
|
|
I keep looking for whether the retirement saver's tax credit is affected and can't find anything.
|
|
#
?
Dec 3, 2017 04:31
|
|
|
Suppose that under the new tax laws, a person can't effectively deduct their mortgage interest on their own property, but landlords still can. Assuming you had other passive income to offset, could you rent your place to yourself/your spouse for a token amount and capture mortgage interest and depreciation?
|
|
#
?
Dec 3, 2017 13:25
|
|
|
Harveygod posted:I keep looking for whether the retirement saver's tax credit is affected and can't find anything. Not that I know of. They talked about it but I think it was one of those things where they just talked about so they could later say "See, we didn't do some of the most evil poo poo!" Small White Dragon posted:Is there a thread somewhere discussing the ins and outs of the proposed tax law changes? The lol that Trumps president thread in GBS? Just make it this thread, I say. The tax plan is good if you: 1. Are rich as gently caress. 2. Don't itemize. 3. Have a shitpile of kids (depends whether the child tax credit ends up being 1600 or 2000 though, the house and senate plans differ.) 4. Live in a state with little or no state and local taxes. 5. Desire to eat the rich after it kicks off full on class war. The tax plan is bad if you: 1. Itemize. 2. Live in a relatively high tax state (which includes places like Iowa and Wisconsin and Minnesota, it ain't just those commies in NY and CA) 3. Are single and have no kids. 4. Are rich and dislike being eaten. I've looked at a lot of different scenarios but one of the most telling to me is that a 60k earning single no kids typical itemizer in IA gets an 800 dollar tax hike and a 250k earning 3 kids married filing jointly itemizer in Nevada gets a 4300 dollar tax cut. I haven't gotten super precise with my personal numbers yet but my best guess is I'll lose 250 with the house plan and gain 500 with the senate plan. I think this calculator is accurate and up to date: http://taxplancalculator.com/
|
|
#
?
Dec 3, 2017 16:54
|
|
|
MadDogMike posted:It’s supposed to go to the person actually making the mortgage payments (who is thus paying the interest) though if it’s paid out of a joint account I suppose you could split it by saying it’s paid by both of you. You definitely don’t have a restriction like with MFS on who can itemize though, that ONLY applies to married couples. Unmarried couples can have one itemize and the other do standard without any issue. That's perfect then because one person taking all the interest plus one person taking the standard is way better than splitting the interest 50/50. I thought there might be some way they prevent this though since it's an obvious benefit for single cohabitators over marrieds.
|
|
#
?
Dec 3, 2017 17:05
|
|
|
scrubs season six posted:3. Have a shitpile of kids (depends whether the child tax credit ends up being 1600 or 2000 though, the house and senate plans differ.) Is this true? The $4050 personal exemption that you currently get per child is being taken away and replaced with an increase to a tax credit that phases out at like $75k/$110k of income. So if you have a high income, you lose a $4050 exemption per child and you won't even get a benefit from an increase in the child tax credit since it phased out already.
|
|
#
?
Dec 3, 2017 17:12
|
|
|
Droo posted:Is this true? The $4050 personal exemption that you currently get per child is being taken away and replaced with an increase to a tax credit that phases out at like $75k/$110k of income. So if you have a high income, you lose a $4050 exemption per child and you won't even get a benefit from an increase in the child tax credit since it phased out already. The Senate plan bumps the phase-out to $500k for married couples, and a $2000 credit is worth more than a $4050 exemption. I have a relatively high income and two kids in a no-income-tax state and that calculator says my taxes will go down by over $6000 under the Senate plan.
|
|
#
?
Dec 3, 2017 17:46
|
|
|
Handsome Wife posted:The Senate plan bumps the phase-out to $500k for married couples, and a $2000 credit is worth more than a $4050 exemption. I have a relatively high income and two kids in a no-income-tax state and that calculator says my taxes will go down by over $6000 under the Senate plan. I didn't realize they raised the phaseout to 500k, so that explains it - anyone with income over the current phaseout and under the new one will effectively get a new $1600/$2000 credit in exchange for their $4k exemption, while anyone under the current phaseout limit will only get an extra $600/$1000 credit which is more of a wash. A nice little bonus for high income people with kids I guess, at least until 2022 or whatever year it all disappears. It will be interesting to see how much worse it gets for individual filers as they mark it up this week - I remember when Trump first started taking about this as a candidate he referenced a $50k standard deduction, then it went down to $30k, now it's at $24k.
|
|
#
?
Dec 3, 2017 17:57
|
|
|
I’ve been watching this closely for obvious reasons, so can try to explain a few things if folks have specific questions. One thing worth noting is that the increased child tax credit is only an increase to the nonrefundable credit, the refundable part (which adds to the actual refund you can receive) stays at $1000 max so it helps richer families more. And of course I’m pretty sure it’s set to auto-expire in a few years which would drop everybody back to the original $1000. If you want a short take from me from what I’ve read: “It’s bad, gives away tons of money to big business and the rich, lower income to middle class some are hurt right away, then every one of them gets hurt when all the nice stuff they put in as cover goes away in a few years automatically (unless the Republicans use it as a hostage in later years against the Democrats)”.scrubs season six posted:That's perfect then because one person taking all the interest plus one person taking the standard is way better than splitting the interest 50/50. I thought there might be some way they prevent this though since it's an obvious benefit for single cohabitators over marrieds. It’s more a factor of “married people are expected to share income, it’s unfair to assume that of unmarried couples”. Minus that assumption that income is shared, which causes a lot of the differences between MFS and single filing status (as well as some other things, there’s never any gift tax between spouses while unmarried has the usual rate for one), the IRS has to go by “who actually paid this?”. Now if you did split the payments you’d be obliged to allocate the interest by the same percentage as the split. Also, if you aren’t actually paying at least half the cost for the home (of which the mortgage tends to be a big chunk) you’re residing in you can’t do head of household FYI, so keep that in mind if one of you claims kids they’d be single with dependents, not head of household.
|
|
#
?
Dec 4, 2017 18:17
|
|
|
baquerd posted:Suppose that under the new tax laws, a person can't effectively deduct their mortgage interest on their own property, but landlords still can. Assuming you had other passive income to offset, could you rent your place to yourself/your spouse for a token amount and capture mortgage interest and depreciation? Self-rental specifically gets inferior tax treatment so that you can't do it: https://www.thetaxadviser.com/issues/2008/aug/avoidingtheself-rentaltrap.html If the tax changes make the incentive big enough, we may see people push the boundary on this. Heady times!
|
|
#
?
Dec 4, 2017 18:52
|
|
|
Sounds like they really simplified the tax code! Honestly though, this tax bill is worth it for the schadenfreude alone: http://www.theintelligencer.net/news/top-headlines/2017/12/murray-tax-plan-would-cost-firm-60m/ quote:WHEELING –Murray Energy Corp. Chairman, President and CEO Robert Murray said the U.S. Senate’s version of the federal tax reform bill will increase his company’s taxes by $60 million per year. You may remember this guy from the lawsuit involving Jon Oliver and magic squirrels.
|
|
#
?
Dec 4, 2017 19:35
|
|
|
scrubs season six posted:I think this calculator is accurate and up to date: This calculator doesn't take into account your local and state taxes if you follow the directions, unless I'm missing something.
|
|
#
?
Dec 4, 2017 22:17
|
|
|
Droo posted:Sounds like they really simplified the tax code! I really don't know whether to think this is great or awful.
|
|
#
?
Dec 5, 2017 01:37
|
|
|
Droo posted:Sounds like they really simplified the tax code! Apparently they hosed up the corporate AMT. Well, they hosed up a lot of things, but this was accidental.
|
|
#
?
Dec 5, 2017 04:53
|
|
|
baquerd posted:This calculator doesn't take into account your local and state taxes if you follow the directions, unless I'm missing something. I think it does. It just tells you not to include them in your itemizations because it calculates them for you (and then doesn't allow you to deduct them with the new plans). It even deducts a sales tax deduction since I'm in a 0 state income tax state.
|
|
#
?
Dec 5, 2017 13:50
|
|
|
Droo posted:Sounds like they really simplified the tax code! But how could paying 20% screw him when our rate right now is the worst in the world at 35%?! Lowering the business rate to 20% is gonna mean that the people that were only paying 10% due to deductions are now all paying 0%. Or probably -10%.
|
|
#
?
Dec 5, 2017 13:53
|
|
|
|
| # ? Jun 1, 2024 05:09 |
|
|
scrubs season six posted:But how could paying 20% screw him when our rate right now is the worst in the world at 35%?! You can get various corporate tax *credits*, which are a dollar-for-dollar reduction in tax, as opposed to corporate *deductions*, which reduce the amount you apply the tax rate to. Credits are far more desirable than deductions. With various credits (research and development is a good example) you can drive your tax rate down way low, but corporate AMT says "hey, stop - you can only drive it down so far before we FORCE you to pay in some taxes." Essentially, the hand scribbled note threw corporate AMT back in, so no matter how low you try and drive your corporate taxes down for "normal" tax reasons, AMT will always stop it at 20%.
|
|
#
?
Dec 6, 2017 21:02
|
|
