New taxes for me, Al Franken
Dec. 5th, 2017 04:08 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
livingdebI decided to investigate how the new tax plans would affect me, Al Frankin.* I did not double-check my math, let alone my assumptions, so take the following with a huge grain of salt. (For a brief summary, scroll down to the [second] boldfaced part.)
I consider myself rich by normal standards (I make enough money to happily live on and have no dependents; by another measure, my income taxes are positive). But I do not consider myself rich by top 1% standards. So, would my taxes go up or down? (Suspense!)
With the current system it is best for me to bunch my deductions. That means that in alternate years, I shouldn't pay my property taxes until January; in other years, pay them in December. Thus, every other calendar year I would pay two years worth of property taxes. If I also save up the bulk of my charitable donations for those years, my itemized deductions are rather huge. Then in the other years I can take the standard deduction.
Under the current rules, my taxes would be about $850 for itemized years and $1125 edited to add: this number is way too low** for the standard years. That's an average of just under $1000. (I know! Tiny! But my pension is only $27K/year.)
Under the proposed tax plans, itemizing is not as profitable because the standard deduction is doubled (or nearly doubled in the House version) and there is no personal exemption. If I nevertheless bunched deductions, I could pay about $1320 (House version) or $1500 (Senate version). In the standard deduction years, my taxes would be about $1750 (House version) or $1850 (Senate version). That is an average of just under $1500 (House version) or $1675 (Senate version).
In conclusion, would the new tax plan reduce my taxes? No, it would increase them by 50%-70%. Edited to add: no, more like 7%** Yikes. I wouldn't mind an increase of 10% - 20% to finance important things, and admittedly 50% - 70% of my cute, tiny taxes isn't all that much, but I am not pleased. I had hoped that my conclusion to this post would be that although my own taxes would be better, I would still oppose the new proposals for all the damage it would do to other people. But no, I get to oppose the proposals for personal reasons as well.
Would the new tax plan at least simplify my taxes? No, I would still save money bunching my deductions. And I would still look up my taxes in a table or multiply by 12%. Well, I wouldn't have to look up my estimated sales tax in a table during the itemization years, so that would save me several seconds in alternate years.
*This is from an old "Saturday Night Live" skit format where Al Franken would discuss how various current events affected him personally, as if anyone else cared.
**Sorry, bad math. See my revised calculations.
I consider myself rich by normal standards (I make enough money to happily live on and have no dependents; by another measure, my income taxes are positive). But I do not consider myself rich by top 1% standards. So, would my taxes go up or down? (Suspense!)
With the current system it is best for me to bunch my deductions. That means that in alternate years, I shouldn't pay my property taxes until January; in other years, pay them in December. Thus, every other calendar year I would pay two years worth of property taxes. If I also save up the bulk of my charitable donations for those years, my itemized deductions are rather huge. Then in the other years I can take the standard deduction.
Under the current rules, my taxes would be about $850 for itemized years and $1125 edited to add: this number is way too low** for the standard years. That's an average of just under $1000. (I know! Tiny! But my pension is only $27K/year.)
Under the proposed tax plans, itemizing is not as profitable because the standard deduction is doubled (or nearly doubled in the House version) and there is no personal exemption. If I nevertheless bunched deductions, I could pay about $1320 (House version) or $1500 (Senate version). In the standard deduction years, my taxes would be about $1750 (House version) or $1850 (Senate version). That is an average of just under $1500 (House version) or $1675 (Senate version).
In conclusion, would the new tax plan reduce my taxes? No, it would increase them by 50%-70%. Edited to add: no, more like 7%** Yikes. I wouldn't mind an increase of 10% - 20% to finance important things, and admittedly 50% - 70% of my cute, tiny taxes isn't all that much, but I am not pleased. I had hoped that my conclusion to this post would be that although my own taxes would be better, I would still oppose the new proposals for all the damage it would do to other people. But no, I get to oppose the proposals for personal reasons as well.
Would the new tax plan at least simplify my taxes? No, I would still save money bunching my deductions. And I would still look up my taxes in a table or multiply by 12%. Well, I wouldn't have to look up my estimated sales tax in a table during the itemization years, so that would save me several seconds in alternate years.
*This is from an old "Saturday Night Live" skit format where Al Franken would discuss how various current events affected him personally, as if anyone else cared.
**Sorry, bad math. See my revised calculations.