• The TUGBBS forums are completely free and open to the public and exist as the absolute best place for owners to get help and advice about their timeshares for more than 26 years!

    Join tens of thousands of other owners just like you here to get any and all Timeshare questions answered!
  • TUG is starting a new contest that will award $50 to the best review submitted for the month!

    Read more here
  • TUG has now saved timeshare owners more than $14,000,000 dollars just by finding us in time to rescind a new Timeshare purchase! A truly incredible milestone!

    Read more here: TUG saves owners more than $14 Million dollars
  • Please check out the review contest thread here vote for the best review and cast your vote for the best review for Feb 2020! winner gets a $50 gift card!
  • We have compiled all the individual CV threads into a single reference thread here for easy access as they are spread out all over the forum: Coronavirus Info
  • Follow the TUG Member Banner as it travels the world on vacation with Timeshare owners! Also sign up to get the banner sent to you so you can submit a photo of your vacation with the banner to share with TUG! Banner Thread
  • Sign up to get the TUG Newsletter for free! Join tens of thousands of other owners who get this every week! Latest resort reviews and the most important topics discussed by owners during the week!
  • Our official "end my sales presentation early" T-shirts are available again! Also come with the option for a free membership extension with purchase to offset the cost!

    Read more Here
  • A few of the most common links here on the forums for newbies and guests!

A Guide to the Tax Changes

MULTIZ321

TUG Member
Joined
Jun 6, 2005
Messages
19,211
Reaction score
3,343
Points
598
Location
FT. LAUDERDALE, FL
Resorts Owned
BLUEWATER BY SPINNAKER HHI
ROYAL HOLIDAY CLUB RHC (POINTS)
A guide to the Tax Changes
By Eugene Kiely/ FactCheck.org

"The Tax Cuts and Jobs Act is now law.

The House and Senate approved the bill on Dec. 19. It passed 227-203 in the House with no Democratic votes and 12 Republican “no” votes. The Senate then passed the bill 51-48 along strict party lines, with one Republican senator, John McCain, not voting.

Because of minor changes in the bill made by the Senate, the House was required to pass the bill again before sending it to the president. The House gave final approval on Dec. 20 by a 224 to 201 vote. Again, the bill received no Democratic support and was opposed by 12 Republicans. President Donald Trump signed it on Dec. 22.

Here we compare some of the major provisions of the new law with the previous tax code...."

Individual Income Tax Rates
The bill maintains seven individual income tax brackets, but changes the tax rates and thresholds. See the charts below.

Previous law: These are the tax brackets that individual taxpayers will use when filing taxes in 2018 for the 2017 tax year, according to the IRS (see pages 7-9).

Single Filers
Tax Bracket
Taxable Income
10 percent Up to $9,325
15 percent $9,326-$37,950
25 percent $37,951-$91,900
28 percent $91,901-$191,650
33 percent $191,651-$416,700
35 percent $416,701-$418,400
39.6 percent Over $418,400......


Richard
 

Roger830

TUG Member
Joined
Dec 11, 2013
Messages
990
Reaction score
219
Points
153
Location
CT
A big help to us retired folks on ss is the increase of the standard deduction from $12,700 to $24,000.
 

alwysonvac

Sighting Expert
TUG Lifetime Member
Joined
Sep 11, 2005
Messages
13,222
Reaction score
1,583
Points
598
Location
New Jersey
Resorts Owned
WorldMark,
HGVC (Oahu & Vegas),
VISTANA Mandatory (Orlando & Scottsdale)

Bought and sold several over the years including Disney & Four Seasons
A big help to us retired folks on ss is the increase of the standard deduction from $12,700 to $24,000.
Before you go jumping for joy, make sure you read everything.
For example personal exemptions are eliminated and state & local tax deductions are capped.


Personal Exemption
A personal exemption is the amount that you can deduct from your income for every taxpayer and most dependents claimed on your return.

Previous law: $4,050 per person, which means a married couple with two dependents would receive a personal exemption of $16,200.

New law: The personal exemption is eliminated. The exemption returns after 2025.

State and Local Tax Deductions
Previous law: Taxpayers who itemize their taxes can deduct state and local property and real estate taxes, and either state and local income or sales taxes. For more information, see our item “The Facts on the SALT Deduction.”

New law: The SALT deduction will be capped at $10,000. The deduction limit ends after 2025.
 

rapmarks

TUG Review Crew: Elite
TUG Member
Joined
Jun 6, 2005
Messages
6,503
Reaction score
1,643
Points
449
Before you go jumping for joy, make sure you read everything.
For example personal exemptions are eliminated and state & local tax deductions are capped.


Personal Exemption
A personal exemption is the amount that you can deduct from your income for every taxpayer and most dependents claimed on your return.

Previous law: $4,050 per person, which means a married couple with two dependents would receive a personal exemption of $16,200.

New law: The personal exemption is eliminated. The exemption returns after 2025.

State and Local Tax Deductions
Previous law: Taxpayers who itemize their taxes can deduct state and local property and real estate taxes, and either state and local income or sales taxes. For more information, see our item “The Facts on the SALT Deduction.”

New law: The SALT deduction will be capped at $10,000. The deduction limit ends after 2025.
It is funny how people don't realize that part. I always thought seniors got an additional personal deduction. I think a lot of people don't do their own taxes, so they don't realize this.
 

GetawaysRus

TUG Member
Joined
Aug 15, 2006
Messages
1,014
Reaction score
375
Points
293
Location
Southern California
Resorts Owned
Marriott Desert Villas 2
Sedona Summit
Taxes are one of those things in life that are complicated, and I suspect that the GOP tax bill doesn't really simplify things. I have been trying to understand what's in the bill (I read somewhere that it's nearly 1,100 pages long, but I can't even verify that), but I suspect that I won't fully understand how the tax bill affects my own personal situation until I complete my 2018 income taxes in April 2019.

Nancy Pelosi is a modern-day sage. As she has said before, they had to pass the bill so that we can find out what's in it.
 
Last edited:

Roger830

TUG Member
Joined
Dec 11, 2013
Messages
990
Reaction score
219
Points
153
Location
CT
Before you go jumping for joy, make sure you read everything.
For example personal exemptions are eliminated and state & local tax deductions are capped.
Since my wife retired, we have used the personal exemption even though in the high tax state of Connecticut.

I have always done my own taxes, except the first year I owned a rental property where I found an error when the expert did it.

The new tax law seems a positive for everyone except those with a high income in a high tax state.

The increase in the standard deduction is higher than the loss of the personal exemption for a senior couple.
 

SmithOp

TUG Member
Joined
Jun 17, 2010
Messages
5,487
Reaction score
1,182
Points
349
Location
Costa Mesa, CA
Resorts Owned
HGVC King's Land 2BR Premier 14.4K Points.
It is funny how people don't realize that part. I always thought seniors got an additional personal deduction. I think a lot of people don't do their own taxes, so they don't realize this.
Seniors get additional standard deduction, I haven’t read the bill yet so don’t know if that changes.

If you are legally blind there is another bump to the standard deduction.

Don’t confuse Exemptions with Deductions.

From irs dot gov web site:
Increased Standard Deduction - Additional Standard Deductions

Age: If you are age 65 or older, you may increase your standard deduction by $1,550 if you file single or head-of-household. If you are married filing jointly and you OR your spouse is 65 or older, you may increase your standard deduction by $1,250. If BOTH you and your spouse are 65 or older, you may increase your standard deduction by $2,500.



Sent from my iPad using Tapatalk Pro
 

rapmarks

TUG Review Crew: Elite
TUG Member
Joined
Jun 6, 2005
Messages
6,503
Reaction score
1,643
Points
449
Seniors will still get an additional deduction,close to the current one, someone posted that elsewhere.
Just roughly looking at my bracket, I don't think I am a winner. Of the returns I do, neither of my children will win, my sister will save a little.
But I won't have to stay up at night worrying about the estate tax.
 

VacationForever

Tug Review Crew: Rookie
TUG Member
Joined
Dec 5, 2010
Messages
10,784
Reaction score
4,673
Points
448
Location
Somewhere Out There
It is funny how people don't realize that part. I always thought seniors got an additional personal deduction. I think a lot of people don't do their own taxes, so they don't realize this.
  • If you are over age 65, blind or disabled, you can tack on $1,300 per person to your standard deduction ($1,600 for unmarried taxpayers).
 

VacationForever

Tug Review Crew: Rookie
TUG Member
Joined
Dec 5, 2010
Messages
10,784
Reaction score
4,673
Points
448
Location
Somewhere Out There
I just realized that we are going to lose the deduction for financial advisor/management fees. I am not complaining because the new tax law is not intended to help folks like us who can afford to pay for such fees. Initially I had calculated that the law would save us about 6K in 2018, and now it is down to 1K savings. I think we will end up paying more in the old tax system than the new by 2019.
 

pedro47

TUG Review Crew: Expert
TUG Member
Joined
Jun 6, 2005
Messages
12,060
Reaction score
2,647
Points
548
Location
East Coast
Richard, thanks for the facts check Information.
 

Passepartout

TUG Review Crew: Veteran
TUG Member
Joined
Feb 10, 2007
Messages
22,238
Reaction score
6,177
Points
799
Location
Twin Falls, Eye-Duh-Hoe
Since my DW became eligible for Mandatory Minimum Distributions in this year, and I get hit with MMDs in '18, along with the new tax law's effects with be the need to either pay a LOT of taxes next year, OR make a LOT of charitable contributions. Probably both. Oh, and either arrange for some substantial 'withholding' or plan on writing a big check at tax time. Problem with that is if one writes the big check from tax advantaged accounts (you know, those IRAs we contributed before tax dollars to?) it just triggers yet another 'taxable event'.

Time to develop a strategy. We're contemplating forming a foundation. Sheesh!- I just thought those were just for RICH people! Which we aren't.

Jim
 

VacationForever

Tug Review Crew: Rookie
TUG Member
Joined
Dec 5, 2010
Messages
10,784
Reaction score
4,673
Points
448
Location
Somewhere Out There
Since my DW became eligible for Mandatory Minimum Distributions in this year, and I get hit with MMDs in '18, along with the new tax law's effects with be the need to either pay a LOT of taxes next year, OR make a LOT of charitable contributions. Probably both. Oh, and either arrange for some substantial 'withholding' or plan on writing a big check at tax time. Problem with that is if one writes the big check from tax advantaged accounts (you know, those IRAs we contributed before tax dollars to?) it just triggers yet another 'taxable event'.

Time to develop a strategy. We're contemplating forming a foundation. Sheesh!- I just thought those were just for RICH people! Which we aren't.

Jim
Looking ahead, we are relieved that 32% starts at $315K, although we will be nowhere near that bracket, unless we win the lottery...
 

WinniWoman

TUG Review Crew: Veteran
TUG Member
Joined
Jul 16, 2010
Messages
9,414
Reaction score
4,988
Points
399
Location
The Weirs, New Hampshire
Resorts Owned
Smugglers Notch Resort
Innseason Pollard Brook
I am not worrying about any of it. I am going to just do my taxes like I always do on Tax Act and whatever it is it is. I only am concerned that being in NY we lose the state and local tax exemption and property tax deductions are capped at $10,000. But what can I do about it? Nothing... until I can move the hell out of here.
 

CalGalTraveler

TUG Member
Joined
Dec 21, 2014
Messages
4,638
Reaction score
3,197
Points
348
Location
California
We live in one of the high tax states but are not rich. Higher income but higher cost of living...everything is relative.

This will have a devastating effect on our taxes and ability to stay in our beloved home of 18 years because of the SALT cap on state taxes.

I hope several things happen in the next year:

1) The state government finds a way around this to avoid high tax payers from moving out of state.
a) Calif. is discussing moving state taxes into the payroll tax which will reduce our AGI and enable the write-off of what remains.
b) converting the California school systems to 501c3 to transition school taxes to charitable write-offs. Apparently several states already do this.
c) lower property and state income taxes (pigs will fly)

2) The new regime after the 2018 mid-terms will repeal the SALT cap.


The wealthiest will establish corporations and pass-thru entities for their homes and rent them back to themselves to continue to get the full SALT deduction and stay in their homes. The middle will be forced to sell their homes and downsize to a smaller property tax footprint, leave the state, or become renters.

This legislation is a trojan horse...while some of your taxes may go down for now, it will be more than offset by decreases to your Social Security, and increases to Medicare/Health plan costs to pay for the newly increased deficit spend from this legislation...just wait.
 
Last edited:

Roger830

TUG Member
Joined
Dec 11, 2013
Messages
990
Reaction score
219
Points
153
Location
CT
Since my DW became eligible for Mandatory Minimum Distributions in this year, and I get hit with MMDs in '18, along with the new tax law's effects with be the need to either pay a LOT of taxes next year, OR make a LOT of charitable contributions. Probably both. Oh, and either arrange for some substantial 'withholding' or plan on writing a big check at tax time. Problem with that is if one writes the big check from tax advantaged accounts (you know, those IRAs we contributed before tax dollars to?) it just triggers yet another 'taxable event'.

Time to develop a strategy. We're contemplating forming a foundation. Sheesh!- I just thought those were just for RICH people! Which we aren't.

Jim
I once worked for a small engineering consulting firm.

One time around tax time, the owner was complaining to me about his high taxes. I told him that he should consider himself fortunate, that I wished I paid more taxes. He turned many shades of red.
 

Passepartout

TUG Review Crew: Veteran
TUG Member
Joined
Feb 10, 2007
Messages
22,238
Reaction score
6,177
Points
799
Location
Twin Falls, Eye-Duh-Hoe
One time around tax time, the owner was complaining to me about his high taxes. I told him that he should consider himself fortunate, that I wished I paid more taxes.
My dad once told me something similar. I recall it as wishing he made enough to pay a million dollars in taxes.

It just demonstrates that the wealthy have problems, just like the less so. They are just different problems.

The point, though is that during our working lives we've been told to save and invest in those IRAs, then in the year you turn 70 1/2, you have what amounts to a semi-unexpected windfall that you have to pay taxes on, or give away.
 

CalGalTraveler

TUG Member
Joined
Dec 21, 2014
Messages
4,638
Reaction score
3,197
Points
348
Location
California
The $11,300 increase in the standard deduction and the $2000 child credit plus the lower rate should be a positive for most.
I believe the personal exemption is now eliminated. Wouldn't this elimination offset this benefit? For our family that is a loss of $16,200.

By my math, $13,300 is pennies compared to the loss of $30,000+ SALT deduction and $16,200 loss of the personal exemption. Our children are over 18 (in college) so this is only $11,300 for us. A net increase of $33,000 per year in taxable income without a raise and same cost of living! and growing if property taxes continue to increase. Plus we are paying for 2 kids in college.

Can you imagine adding $33,000 to your tax bill every year? Again, we are not rich (and will be much lesser so) after this change if we don't sell our home or do tax avoidance moves.
 
Last edited:

Luanne

TUG Review Crew: Veteran
TUG Member
Joined
Jun 6, 2005
Messages
12,795
Reaction score
3,363
Points
548
Location
New Mexico
I'm suggesting to dh that we have our taxes figured using itemized deductions and just the standard deduction to see which way we come out better.
 

krj9999

TUG Member
Joined
Aug 30, 2007
Messages
982
Reaction score
94
Points
238
Location
Maryland
Children 17 or older (even if still claimed as dependents) don't qualify for the $2k credit either.

I believe the personal exemption is now eliminated. Wouldn't this elimination offset this benefit? For our family that is a loss of $16,200.

By my math, $13,300 is pennies compared to the loss of $30,000+ SALT deduction and $16,200 loss of the personal exemption. Our children are over 18 (in college) so this is only $11,300 for us. A net increase of $33,000 per year in taxable income without a raise and same cost of living! and growing if property taxes continue to increase. Plus we are paying for 2 kids in college.

Can you imagine adding $33,000 to your tax bill every year? Again, we are not rich (and will be much lesser so) after this change if we don't sell our home or do tax avoidance moves.
 

VacationForever

Tug Review Crew: Rookie
TUG Member
Joined
Dec 5, 2010
Messages
10,784
Reaction score
4,673
Points
448
Location
Somewhere Out There
I believe the personal exemption is now eliminated. Wouldn't this elimination offset this benefit? For our family that is a loss of $16,200.

By my math, $13,300 is pennies compared to the loss of $30,000+ SALT deduction and $16,200 loss of the personal exemption. Our children are over 18 (in college) so this is only $11,300 for us. A net increase of $33,000 per year in taxable income without a raise and same cost of living! and growing if property taxes continue to increase. Plus we are paying for 2 kids in college.

Can you imagine adding $33,000 to your tax bill every year? Again, we are not rich (and will be much lesser so) after this change if we don't sell our home or do tax avoidance moves.
You are considered RICH by the middle class American's standard. In a separate post you had indicated that you have multiple homes. We do not have issues with wealth disparity but this new tax law is not supposed to reduce taxes for the rich individuals, only for corporations and middle class Americans.
 
Last edited:
Top