How GOP Tax Plan May Affect You
| 2017 Taxable Income | How You May Feel | Reason | |
|
Single |
$0 to $9,235
|
Why me? |
Small tax hike (up to $190) |
| $9,326 to $37,950
|
TY | Small tax cut (~$280 to $1,100/yr) | |
| $37,951 to $45,000
|
Yay! | Decent tax cut ($4,900 to $5,800/yr) | |
| $45,001 to $91,900
|
Meh | No change | |
| $91,901 to $200,000
|
Nice!! | Tax cut (~$2,700 to $16,000/yr) | |
| $200,001 to $416,700
|
Really? | Higher taxes (~$4,000 to $8,300/yr) | |
| $416,701 to $418,400
|
Meh | No change | |
| $418,401 to $500,000
|
PARTY!!! | Big tax cut (~$19,200 to $23,000) | |
| More than $500,001 | Meh/Seriously? | No change, but may be taxed at 45.6% if at $1M to $1.2M income | |
|
Married |
__________________
$0 to $18,650
|
___________
Why me? |
________________________
Small tax hike (up to $370) |
| $18,651 to $75,900
|
TY | Small tax cut (~$600 to $2,300/yr) | |
| $75,901 to $90,000
|
Yay! | Decent tax cut (~$10,000/yr) | |
| $90,001 to $153,100
|
Meh | No change | |
| $153,101 to $260,000
|
Nice!! | Tax cut (~$4,600 to $20,800/yr) | |
| $260,001 to $416,700
|
Really? | Higher taxes (~$5,200 to $8,400/yr) | |
| $416,701 to $470,700
|
Meh | No change | |
| $470,701 to $1 million
|
PARTY!!! | Big tax cut (~$21,000 to $46,000) | |
| More than $1 million
|
Meh/Seriously? | No change, but may be taxed at 45.6% if at $1.2M to $1.6M income |
| You:
|
How You May Feel
|
Reason
|
| Have kids | Bit sad. | Personal exemptions repealed, but might be offset by bigger child tax credit.
|
| Saving for kids | Interesting | 529 can be used for elementary & high school education too.
|
| Itemize | Sad | Can no longer include state & local taxes. Medical expense deductions repealed.
|
| Small business owner | Yay? | Pass-through income will be taxed at 25%. But would not apply to many. Rules are complicated.
|
| Employee | Really? | Many tax-advantaged employee fringe benefits repealed, like dependent care assistance & educational assistance.
|
| Homeowner | Say what? | Mortgage interest deduction limited to up to $500,000 of new mortgages, not $1 million. Home equity indebtedness no longer deductible.
|
| Have student loans, make <$80k/yr | Really? | You can no longer deduct $2,500 of student loan interest.
|
| File AMT | That’s what I’m talking about. | AMT repealed.
|
| Have investments in brokerage accounts
|
Meh | Capital gains rates are same, but tied to old tax brackets.
|
| Do “back-door Roth contributions”
|
Yay! | Untouched.
|
| Plan to give away millions to your children | PARTY!! | Estate tax exemption increased to $11.2M ($22.4M for couple). Estate tax to be repealed in 2024.
|
About Alvin Carlos, CFA, CFP®
Alvin Carlos, CFA, CFP® is passionate about helping middle class professionals make smarter financial decisions. He is the CEO of District Capital Management, a financial planning and investment management firm for the everyday people. Alvin is a CERTIFIED FINANCIAL PLANNER™ practitioner and has a Masters degree in International Relations from SAIS-Johns Hopkins. In his spare time, Alvin enjoys swing dancing and Ultimate Frisbee. He also volunteers for Catholic Charities’ new Financial Stability Network, which helps low-income folks with their finances.
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