You are a middle class American who got hosed by the #GOPTaxScam after you were told that you would get a $4,000 tax break!
How did this happen? Well the GOP did it deliberately.
Stick with me through this long thread and let’s break down what they did.
How did this happen? Well the GOP did it deliberately.
Stick with me through this long thread and let’s break down what they did.
1/ First, how do taxes work? Your big concern is not how much money you make, it is your TAXABLE income.
That is the important number.
All that matters is that.
If your TAXABLE income is higher, then you pay more taxes.
That is the important number.
All that matters is that.
If your TAXABLE income is higher, then you pay more taxes.
2/ Your TAXABLE income is what is left after deductions and exemptions are subtracted.
So the #GOPTaxScam removed the exemptions and many of the deductions the middle class normally used to reduce that number.
So the #GOPTaxScam removed the exemptions and many of the deductions the middle class normally used to reduce that number.
3/ How is your TAXABLE income calculated?
You have Gross Income that is your total income before any deductions.
You then take “above the line” deductions, which do not require itemization to determine your Adjusted Gross Income (AGI).
You have Gross Income that is your total income before any deductions.
You then take “above the line” deductions, which do not require itemization to determine your Adjusted Gross Income (AGI).
4/ “above the line” deductions did include things such as:
HSA contributions
Educator contributions
Moving expenses
Alimony
IRA deductions
Student loan deductions
HSA contributions
Educator contributions
Moving expenses
Alimony
IRA deductions
Student loan deductions
5/ You subtract these “above the line” deductions to get number known as your AGI.
Before #GOPTaxScam next step was to deduct your personal exemptions.
So deduct $4,050 for you & each dependent.
Family of four =$16,200.
(was actually scheduled to increase to $4,150 in 2018)
Before #GOPTaxScam next step was to deduct your personal exemptions.
So deduct $4,050 for you & each dependent.
Family of four =$16,200.
(was actually scheduled to increase to $4,150 in 2018)
6/ #GOPTaxScam took away those personal exemptions. They are gone and no longer exist.
This was the first way they screwed you.
This was the first way they screwed you.
7/ Next you deduct an amount that is the larger of your itemized deductions or the standard deduction.
2017 standard deductions:
Single $6,350
Married $12,700
Head of Household $9,350
2018 standard deductions:
Single $12,000
Married $24,000
Head of Household $18,000
2017 standard deductions:
Single $6,350
Married $12,700
Head of Household $9,350
2018 standard deductions:
Single $12,000
Married $24,000
Head of Household $18,000
8/ Yes, the standard deductions went up. But remember you lost the personal exemptions.
Also, many middle class families itemized before 2018 because their itemized deductions added up to a lot more than the standard deduction.
Also, many middle class families itemized before 2018 because their itemized deductions added up to a lot more than the standard deduction.
9/ Itemized deductions on Schedule A did include:
Medical & Dental expenses that exceed 7.5% of your income
Home mortgage interest
Home equity line interest
State taxes
Local taxes
Real estate /property taxes
Charity contributions
Unreimbursed employee expenses
Medical & Dental expenses that exceed 7.5% of your income
Home mortgage interest
Home equity line interest
State taxes
Local taxes
Real estate /property taxes
Charity contributions
Unreimbursed employee expenses
10/ The #GOPTaxScam eliminated or severely limited many of the “above the line” and “below the line” deductions the middle class traditionally used to reduce their TAXABLE income.
This was the second way they screwed you.
This was the second way they screwed you.
11/ What deduction did #GOPTaxScam take away besides your personal exemptions?
Moving expenses – GONE
Unreimbursed employee expenses – GONE
Tax Prep fees – GONE
Investment fees – GONE
Professional fees – GONE
Alimony – GONE
Casualty & Thefts – GONE
Moving expenses – GONE
Unreimbursed employee expenses – GONE
Tax Prep fees – GONE
Investment fees – GONE
Professional fees – GONE
Alimony – GONE
Casualty & Thefts – GONE
12/ Other deductions were severely limited by #GOPTaxScam :
The biggest was deduction for all State & Local Taxes including real estate/property taxes (SALT) is NOW capped at 10K no matter how much you paid.
Many families previously had SALT deductions of 15K – 20K.
The biggest was deduction for all State & Local Taxes including real estate/property taxes (SALT) is NOW capped at 10K no matter how much you paid.
Many families previously had SALT deductions of 15K – 20K.
13/ Home equity interest is now ONLY deductible if proceeds used to improve home.
Previously you could deduct it if you used money for college tuition, debt consolidation, etc.
Medical & Dental expenses now only deductible on amount that exceeds 10% of income. (was 7.5%)
Previously you could deduct it if you used money for college tuition, debt consolidation, etc.
Medical & Dental expenses now only deductible on amount that exceeds 10% of income. (was 7.5%)
14/ Yeah, but the child tax credit doubled from 1K to 2K. Surely that makes up for all this right. Nope.
Child tax credit cuts off at 16. Personal exemptions had no age limit. Exemptions could have also been be college kids or elderly parent.
Child tax credit cuts off at 16. Personal exemptions had no age limit. Exemptions could have also been be college kids or elderly parent.
15/ Under the new #GOPTaxScam if you have 2 kids above 16 then you get NO child tax credits but still lose personal exemptions.
How does all this shake out in the real world?
Let’s look at some examples......
How does all this shake out in the real world?
Let’s look at some examples......
16/ Family with one kid over 16
2017
$12,050 personal exemptions
$28K in itemized (including SALT of $15K)
Total deductions = $40,050
2018
Total deductions = $24,000
Now paying tax on $16,050 more income and no child tax credit.
At 22% = $3,531 tax increase.
2017
$12,050 personal exemptions
$28K in itemized (including SALT of $15K)
Total deductions = $40,050
2018
Total deductions = $24,000
Now paying tax on $16,050 more income and no child tax credit.
At 22% = $3,531 tax increase.
17/
Family of five
2017
$20,250 (5 x $4050) personal exemptions PLUS deductions (mortgage int, charity, SALT, etc.) of $26K
Total deduction=$46,250
2018
standard deduction of $24K
Pay tax on $22,250 more income
Income over $38,701 taxed at 22%
Result = $4,895 tax increase
Family of five
2017
$20,250 (5 x $4050) personal exemptions PLUS deductions (mortgage int, charity, SALT, etc.) of $26K
Total deduction=$46,250
2018
standard deduction of $24K
Pay tax on $22,250 more income
Income over $38,701 taxed at 22%
Result = $4,895 tax increase
18/ What about single tax payers, did they go untouched by the #GOPTaxScam ?
No. Here are some scenarios.....
No. Here are some scenarios.....
19/ Single works as traveling professional mechanic
2017
Personal Exemp $4050
Deductions include Mileage $12K, Tools & Equipment $5K, SALT $12K
Total deductions = $33,050
2018
Standard deduction = $12K
Pays tax on $21,050 more income
At 22% = $4,631 tax increase
2017
Personal Exemp $4050
Deductions include Mileage $12K, Tools & Equipment $5K, SALT $12K
Total deductions = $33,050
2018
Standard deduction = $12K
Pays tax on $21,050 more income
At 22% = $4,631 tax increase
20/ Single person
2017
$4050 personal exemp +15K in itemized deductions
2018
$12K standard deduction (can't get 15K in itemized because of SALT caps and other deductions removed)
Pays tax on $7,050 more income.
Above $38,701 taxed at 22%
Result = $1,551 tax increase
2017
$4050 personal exemp +15K in itemized deductions
2018
$12K standard deduction (can't get 15K in itemized because of SALT caps and other deductions removed)
Pays tax on $7,050 more income.
Above $38,701 taxed at 22%
Result = $1,551 tax increase
21/ Some who do not itemize got screwed.
Single parent with 3 kids (over 16)
2017
$9350 standard deduction (head of household)
$16,200 personal exemptions (4 x $4,050)
Total deductions = $25,550
2018
$18,500 standard deduction (head of household)
$7K more taxable income.
Single parent with 3 kids (over 16)
2017
$9350 standard deduction (head of household)
$16,200 personal exemptions (4 x $4,050)
Total deductions = $25,550
2018
$18,500 standard deduction (head of household)
$7K more taxable income.
22/ Some say “well it is not possible to do a tax bill where everybody in middle class gets a tax cut”
Yes it is.
GOP could have just cut bracket rates across the board, left everything else alone and given REAL middle class tax cut.
Yes it is.
GOP could have just cut bracket rates across the board, left everything else alone and given REAL middle class tax cut.
23/ But they didn’t because this was a bait and switch designed to give those at top huge cuts.
GOP knew most people did understand impact of losing exemptions and deductions so they bragged about doubling standard deductions and told their “average $4K cut” lie.
GOP knew most people did understand impact of losing exemptions and deductions so they bragged about doubling standard deductions and told their “average $4K cut” lie.
24/ Did some middle class earners get an actual tax cuts? Yes.
But looking at #GOPTaxSCAMStories it is clear a lot of you got screwed by the #GOPTaxScam and don't understand.
I thought you should know why.
But looking at #GOPTaxSCAMStories it is clear a lot of you got screwed by the #GOPTaxScam and don't understand.
I thought you should know why.
To add insult, the GOP then deliberately rigged the withholding tables to deceive people into thinking they got a tax cut.
This was pure evil.
This was pure evil.
Disclaimer to those following me after this thread:
I drink a lot of whiskey and use a lot of F words.
Sometimes together.
If that bothers you stay away.
I drink a lot of whiskey and use a lot of F words.
Sometimes together.
If that bothers you stay away.
Addendum1:
In 17/ says "family of five" then 24K standard deduction & income over $38K taxed at 22%". If they are married with 24K deduction, then it should be income over 77K taxed at 22%.
Or could be single parent with 4 kids. Then they would only get head of household.....
In 17/ says "family of five" then 24K standard deduction & income over $38K taxed at 22%". If they are married with 24K deduction, then it should be income over 77K taxed at 22%.
Or could be single parent with 4 kids. Then they would only get head of household.....
....deduction and the $38K and 22% would be correct. Then they would get hosed even worse. This was mistake.
Sometimes we make errors being humans when typing in 240 character chunks.
Get over it.
Sometimes we make errors being humans when typing in 240 character chunks.
Get over it.
Addendum2:
Yes, there is a dependent tax credit of $500 which some get for children over 16. Not trying to hide that or deceive.
Just difficult to explain in short scenarios.
Yes, there is a dependent tax credit of $500 which some get for children over 16. Not trying to hide that or deceive.
Just difficult to explain in short scenarios.
Addendum3:
The alimony deduction is gone for divorces after 12/31/18. It remains grandfathered for those before that date.
The alimony deduction is gone for divorces after 12/31/18. It remains grandfathered for those before that date.
Addendum4:
For those who want to add all kinds of extenuating circumstances to the overly simplified examples to tell me how people COULD have paid less taxes, go take a flying leap.
You cannot put EVERYTHING about a tax form in a tweet example....
For those who want to add all kinds of extenuating circumstances to the overly simplified examples to tell me how people COULD have paid less taxes, go take a flying leap.
You cannot put EVERYTHING about a tax form in a tweet example....
....so I simplified to explain to people why their taxes went up. You may want to tell me a "Canadian girlfriend" story of of how somebody you know got a huge tax break. I don't care. The "average $4K middle class tax cut" was a GOP lie.
There are enough replies and examples at #GOPTaxSCAMStories to validate what I am saying. Take your "everybody got a tax cut" BS somewhere else where they believe that garbage.
And the lies continue....
https://twitter.com/USTreasury/status/1094996892101025792
45 million taxpayers itemize their deductions on their returns and the average amount that these taxpayers claimed in itemized deductions was $28,645 per return.
So yes, #GOPTaxScam is gonna hammer a lot of folks.
So yes, #GOPTaxScam is gonna hammer a lot of folks.
#GOPTaxScam took away deduction for unreimbursed employee expenses. Firefighters, Police and Military Reservists can no longer deduct cost of dry cleaning or alterations to uniforms. So much for GOP loving first responders and military.
This real life example posted by @DesignerErica27 validates what we are talking about.
Married couple in swing state / Florida with 3 kids and owns a house.
Lost 20.5k personal exemptions, plus deductions.
Taxes doubled
Married couple in swing state / Florida with 3 kids and owns a house.
Lost 20.5k personal exemptions, plus deductions.
Taxes doubled
Yep, this is real
reuters.com/article/us-usa…
reuters.com/article/us-usa…
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