Tax Time Nightmare….Trump’s Tax Reforms Cost me big time

Home Forums Decaffeinated Coffee Rants Tax Time Nightmare….Trump’s Tax Reforms Cost me big time

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  • #1710356

    CTLAWYER
    Participant

    I have just finished personal tax returns for Mrs. CTL and myself as well as our two daughters and their families (sons due their own returns).
    Trump’s tax changes capped deductions for state taxes (property and income and sales tax) at $10,000.
    We all live in CT and have homes valued and taxed at values above 500K and less than 900K, We also have to pay property tax on cars, sales tax and state income tax.

    I ran the returns using the new tax laws and software used last year.
    Each daughters’ taxes increased between 5 and 10K on similar income
    Mrs. CTL and I are paying more 27K more than last year on the same income.

    I was ridiculed here on the CR when I stated that I expected my tax liability would increase 20K+ under the new laws and that it would reduce my charitable giving.

    I have just gone through my list of secondary and tertiary charities and reduced or eliminated donations planned for the rest of 2019.

    With the changes done to the ACA (Obamacare) our medical expenses have also gone up dramatically putting a further squeeze on disposable income.
    B”H I am not crying poverty, BUT the dire predictions I made about Trump’s tax and insurance rules have come true.
    I do not know anyone in my community who has realized a true tax cut under the plan. I guess none of us are that 1%.

    #1710418

    Milhouse
    Participant

    If the people of your state vote for ridiculously high state taxes there’s no reason for the rest of the country to subsidize them. The full burden should fall on your state’s taxpayers, so you will fight to get them lowered, or else move to a state with more reasonable taxes.

    #1710421

    🍫Syag Lchochma
    Participant

    CTL – I definitely hear you and believe your story. And I feel bad because no matter how much you have, you are entitled to have whatever you came to honestly and living a “richer life” does not entitle others to care less about your loss. I want to ADD, however, that my tax return showed a tremendous drop in my deductions but an increase in other areas, leaving me with almost the same return. And I just helped two other families file their taxes. One received very little in return and one received thousands more, thru various credits, than they would have otherwise received. And that is food money. So while I do NOT belittle your loss, my happiness for those with small kids, private tuitions etc who now get enough more to cover some bills makes it worthwhile in my eyes. And thankfully, two of those families won’t have to pay a fine they can’t afford for not having health insurance that they can’t afford.

    Again, my point is not to negate your claim or belittle your complaint, it is to make you aware that there are a lot of people out there who are benefitting greatly. Please be happy for them as they are no less important US citizens than you and yours.

    #1710433

    Joseph
    Participant

    You’re wealthy. You support higher taxes on the wealthy. You should be happy to be paying higher taxes.

    The vast majority of the American middle class saw a reduction after the Trump tax cuts compared to before. That is overall, even if property taxation in isolation rose for some.

    P.S. A lawyer AND an accountant? You really ARE everything!

    #1710449

    Neville ChaimBerlin
    Participant

    This makes me so happy. I saved huge thanks to Trump, and the wealthy blue state folks are paying through the nose. Can’t wait to reelect.

    #1710446

    CTLAWYER
    Participant

    @SyagLchochma
    You know I have been a cheerleader for the ACA. I happen to live in a state where it works well (CT has its own healthcare exchange) and it is affordable. Unfortunately that is not the case nationwide.
    I was reviewing the situation of a client couple in their early 60s in January. They both are drawing Social Security taken at 62 and job pensions. Their income is about 45K. They own their home free and clear, living it it for almost 35 years, children grown and gone. They purchased a Silver level choice PPO from Connecticare (a private insurance co) through the healthcare exchange. With the advance tax credit the monthly premium is $122.08 (for both). It has a $20 copay for primary care doc, $30 specialists, Drugs are $5, 20 and $35. The MAXIMUM out of pocket per person is $2500 per year ($5000/family).
    The federal government charges me more than that each month for my basic medicare premium with less coverage and higher deductible and out of pocket costs.

    #1710442

    lakewhut
    Participant

    It helped me

    #1710439

    🍫Syag Lchochma
    Participant

    Joseph – I don’t know if the vast majority of the middle class saw a reduction, I think the difference is how many young children you have. Those with no very young children lost out on the dependents without getting increases in child related credits. Those who have no very young and many over 18 probably took a hit.

    #1710441

    lakewhut
    Participant

    Move to a lower tax state.

    #1710440

    CTLAWYER
    Participant

    @joseph
    I am well off, I don’t fit into the 1% or even 3% of top incomes in the USA.
    I am not an accountant, but my undergraduate studies were at the Wharton School of Finance, University of Pennsylvania. Being a family law, wills, trusts and estates attorney, the tax codes are an integral part of my practice We prepare tax returns for many trusts/clients as well as assist in tax planning (which is a major reason to create trusts).
    I cannot speak for the vast majority of the American middle class, but I doubt most of those in the northeast and California saw a tax decrease.
    I live in a small town with an average family income of 115K and average single family home market value of 450K which means an average property tax of 15K plus state income tax. This is not a wealthy suburb of top executives, but working people, teachers, lawyers, doctors, tradesmen and small business owners.
    The town ran a free income tax clinic at the library three days this week. Those residents using the service were asked to fill out a short survey (no names)……72% had higher tax bills/lower refunds for 2018 than 2017 on similar incomes. Many of our residents are seniors on Social Security and fixed incomes. Without being able to deduct the full state and local taxes they are eating into their capital and being forced to consider selling and moving to cheaper cost of living states.

    #1710465

    ☕ DaasYochid ☕
    Participant

    In other words, Trump’s tax reform did exactly what it was supposed to do. Tax the liberals.

    #1710470

    shimiU
    Participant

    Move to Florida.

    #1710472

    Joseph
    Participant

    The CBO, IRS and other official sources ran the figures and put on the record that the tax code changes made with the Trump Tax Reform act resulted in a large majority of the middle class across the United States seeing a reduction in their federal annual taxes. This is looking at the net results of all the changes from the tax changes, not just the property taxes issue alone. IOW, even those who may have seen higher taxes as a result of the property no longer being fully deductible, most of them had an even larger decrease on the rest of their taxes to more than make up for the property increase.

    And of the minority that didn’t see a decrease, they mostly had about the same overall tax liability as before the changes.

    There were very very few middle class who saw an overall increase in their tax liability after the change. Those that had such an increase were mostly the wealthier people living in states with high property taxes. And even most of the wealthier folks also had an overall decrease in Federal tax liability.

    #1710497

    Avi K
    Participant

    CTL, I thought that you like paying taxes. The US national debt is now $22 trillion dollars. Unless something drastic is done the Social Security Trust Fund will run out of money in 2034. At that point only 79% of benefits will be payable. Even after I become eligible for an Israeli Senior Citizen’s allowance that will be half of my income. Of course, if the dollar collapses before that the whole world will be in deep trouble. People will simply have to tighten up. Certainly no green new deals and other economic luncaies, Profligate states will have to put on the brakes to or put in receivership (this is what Israel does when a municipality does not keep its financial house in order.

    #1710506

    CTLAWYER
    Participant

    @shimiu
    Not interested in living in Florida. My law practice is long established where I live and my children and grandchildren are also here. I’ve had a 2nd home in Florida for more than 30 years but have no desire to ever live there full time.

    #1710536

    anonymous Jew
    Participant

    Alot of people thought they suffered because they had smaller refunds. It was then discovered that because the new ( and lower ) withholding wasn’t implemented until February, there was less withholding, higher net checks and thus, lower refund.
    The doubling of it the standard deduction helped.
    Our dear Gov Cuomo actually blamed the tax cap on the rise in New Yorkers leaving NY, not the taxes themselves.

    #1710546

    Forshayer
    Participant

    @ctlawyer, then Monsey or anywhere in Rockland and Westchester Counties are not going to be any better for you. This mornings local Journal News stated that both of the above referenced counties were 1 and 2 in the country for property taxes. And like Daas said earlier, he accomplished exactly what he set out to do, which is to lower the burden on middle America. The 2 coasts, or the NE and California to be specific, were not now or ever on his most favorite list.

    #1710561

    CTLAWYER
    Participant

    @AviK
    if the government returned the billions or trillions it has raided from the Social Trust funds there would be no shortage in 2034………………..
    It has been used illegally as a private Congressional piggy bank for decades.

    I have not posted that I object to paying taxes. I am illustrating the effects of the Trump tax scheme on me and my family. I predicted the result in advance and my tax returns have proved my prediction to be correct. 20K in Tzedaka that i gave last year will not be given this year due to my increased tax bill.

    #1710580

    1
    Participant

    CTL “20K in Tzedaka that i gave last year will not be given this year due to my increased tax bill.”
    Are you punishing Hashem?

    #1710613

    Joseph
    Participant

    “Are you punishing Hashem?”

    He poshut cannot afford it anymore. It may be kdai to raise tzedaka for him, now.

    #1710663

    akuperma
    Participant

    Acting against his own personal economic interests (assuming he is as rich as he claims to be and isn’t just faking it), Trump targeted high income persons and affluent home owners in states with high state taxation, and benefits those with lower incomes who can’t afford to own a home and live in poorer states.
    This is the idea of progressive taxation. Until recently, it was the Democrats who favored a “tax the rich”, but as the Democrats become the party of Limousine liberals it appears it is now the Republicans who are the party of that favors progressive tax rates.

    #1710677

    DovidBT
    Participant

    CTL: Maybe you could use one of the crowdfunding web sites to solicit donations to restore your losses?

    #1710702

    justme22
    Participant

    My taxes are much lower this time.
    And while my health insurance was cheaper before ACA , trumps executive directive made my health insurance much better for the money. I do understand that those in liberal states with higher taxes loose out

    #1710706

    Gadolhadorah
    Participant

    To those who mindlessly spout nareshkeit about why should we who live in low tax states “subsidize” those who live in high tax states (by making those taxes deductible for federal income purposes, I would simply note that most of the “low tax” states get several times more in federal spending and contracts than the high tax states. For example, Florida, Texas and South Dakota gets back $3- $4 for every $1 dollar they pay in federal taxes whereas Connecticut, Delaware and NYS get back less than $1 for each dollar they pay in taxes. What that means in that the low tax states are really the ones being subsidized by the higher tax states. That also ignores the general trend that low tax states (Mississippi, Louisiana, West Virginia) have among the worst health care and educational metrics in the country because they dedicate such little funding to their citizens’ well being and education.

    #1710707

    justme22
    Participant

    “They purchased a Silver level choice PPO from Connecticare (a private insurance co) through the healthcare exchange. With the advance tax credit the monthly premium is $122.08 (for both). It has a $20 copay for primary care doc, $30 specialists, Drugs are $5, 20 and $35. The MAXIMUM out of pocket per person is $2500 per year ($5000/family״
    Hard to believe, I used to pay $125 before Obamacare without the government subsidizing me. Obamacare took my premium up from 125 to 260 (after a subsidy that tax payers didn’t pay before ) with Obamacare my deductible went from 1k to 5k ..trump signed the executive order and my premium went down by $10 yet my deductible went down to 1k
    There are many nice perks to aca coverage insurance but worth it ???

    #1710711

    apushatayid
    Participant

    Pundits were very clear. This was a clear swipe at the blue states specifically the governor’s who oppose his very existence. Make them squirm when their citizens realize uncle Sam will no longer subside their tax and spend ways. From this read it’s clear citizens took a hit. The question remains, will they blame Trump or forcer governors to rethink tax and spend.

    #1710723

    Neville ChaimBerlin
    Participant

    “I am illustrating the effects of the Trump tax scheme on me and my family.”

    CTL: I’d rather just laugh at you than be serious, but in case anyone is actually taking what you’re saying seriously, let’s state the facts:
    Previously, your blue state high taxes were masked by unfair deductions that shifted the tax burden to the rest of us.
    Under Trump’s plan, the rest of the country stopped subsidizing your lavish-spending, blue state policies, so now you’re seeing how much the local politicians YOU supported have been costing you all these years.
    And, naturally, you blame Trump.

    Taxes are lower on the middle class. People saying otherwise are probably rich people diluting themselves into believing they’re middle class as they so often do. If you’re making less than 70k for a household income, there’s no way upping the standard deduction to 24K didn’t help.

    #1710761

    Avi K
    Participant

    CTL, the funds are, in fact a pork barrel for all kinds of benefits never intended to be part of Soc Sec. However, the National Ponzi Scheme would probably keep going had people kept on having kids at Baby Boom levels and if the now retiring Boomers would do the younger set a favor and die earlier.

    #1710810

    CTLAWYER
    Participant

    @justme22
    Was your pre-ACA plan 100% paid by yourself, or was the $125/month your contribution on a group plan provided by an employer or school?
    It makes a huge difference. Those who bought individual plans directly from insurance companies realized the greatest savings under ACA.

    #1710814

    CTLAWYER
    Participant

    @1
    it doesn’t punish Hashem. Tzedaka is given from income, not capital. Less disposable income due to higher taxes yields less charitable giving. It won’t affect affect bequests after I pass, those funds are capital to be disbursed upon death.

    #1710817

    lakewhut
    Participant

    You can afford it either way

    #1710816

    CTLAWYER
    Participant

    @joseph
    That last 20K I gave to Tzedaka last year no longer exists, it has gone for taxes. Maybe all of you who claim lower tax bills thanks to Trump, should increase your tzedaka to make it up. None of it is for my use. B”H our style of living remains unchanged. I’m still driving my 15 year old car, mowing the lawn and taking out the garbage. Snow shoveling season is over

    #1710823

    Joseph
    Participant

    “That last 20K I gave to Tzedaka last year no longer exists, it has gone for taxes.”

    Does the money you spent on vacation last year still exist?

    #1710854

    🍫Syag Lchochma
    Participant

    Joseph – I would not have expected such an ignorant comment from you. As much as you enjoy cheppering, you usually have a better handle on your fellow posters. Not that CTL needs any help from me, I just am getting a bit tired of posters deciding that he has too much money and therefore is guilty of everything they have determined to be characteristic of that. Shame on you for being so gullible.
    First of all, you completely missed his meaning on that comment due to your jumping to conclusions. Secondly, which vacation of his do you think was the problem? Pesach hotel perhaps? Summers in venice or maybe the cruise around the world?
    Unless I am wrong, I think you owe him an apology.

    #1710829

    lakewhut
    Participant

    CTL maybe that’s your punishment for voting Dem – enemies of the Jews

    #1710869

    CTLAWYER
    Participant

    @joseph
    Nice try…………….
    We haven’t gone away on a pleasure vacation for 14 years. We spent the time caring for aged parents, not traveling. We travel on business. Even, the few trips to our Florida home are set for meetings with clients in residence there. I am a member of the Florida bar (as well as CT, MA and NY) and maintain an office in Palm Beach County.

    #1710873

    CTLAWYER
    Participant

    @lakewhut
    The Democrats did not pass or support the Trump tax changes, the Republican controlled Congress did.
    Your hatred is blinding you to the facts…………………………..

    #1710880

    CTLAWYER
    Participant

    @SyagLchochma
    Thanks for reading and digesting, not just swiping.
    Joseph knows full well that I don’t take those lavish vacations. We host the entire family for Pesach in our own home. We have all the grandchildren living with us for the summer, no 10K sleep away camps. I drive a 15 year old car (bought new), cut my own lawn, take out the garbage, paint the interior of the house as needed, cook from scratch (no buying takeout as many do in town) and shovel my own snow.

    There is a finite amount of disposable income that one can spend. My children are all raised and educated and married off. This meant I had more dollars for tzedaka. If taxes go up than the amount of disposable dollars goes down. I never made charitable donations because they were tax deductible, I made them because I deemed the institutions worthy of support.

    #1710965

    lakewhut
    Participant

    Democrats made your taxes high. Vote to lower state tax.

    #1710967

    Joseph
    Participant

    CTL, do I owe you an apology?

    #1710972

    anIsraeliYid
    Participant

    CTL – I’m kind of curious as to why the change in deductibility of state and local taxes impacted your overall taxes so significantly. I’ve not yet done my taxes (still waiting for information from certain partnerships), but based on my experience, many (if not most) middle-to-upper income individuals were in AMT in the past – where the SALT deduction is added back – which mitigated the effect of the new limitation. Of greater import is the loss of the personal and dependent exemptions, particularly if one itemizes and therefore does benefit from the higher standard deduction, or had many dependents who are above the age for the child tax credit – but the exemption was subject to a phase-out, so impact is also limited for higher-income individuals. As such, I’m wondering (professional curiosity – I’m a tax professional, though in the corporate area) what the main driver was for your increased liability?

    an Israeli Yid

    #1711004

    Neville ChaimBerlin
    Participant

    ” Not that CTL needs any help from me, I just am getting a bit tired of posters deciding that he has too much money and therefore is guilty of everything they have determined to be characteristic of that.”

    Give me a break. He consistently demonstrates a disconnect with the lower economic brackets, he consistently says more tax burden should be shifted to the wealthy, then when the times comes to pay the pied piper, he whines about it. We aren’t going to apologize for supporting someone who saved us money just because it happened to cost blue state, ivory tower folks who were benefiting from scamming the rest of the country.

    I’m assuming you’re suddenly rushing to his defense because you relate to his poor wittle rich man status. Everyone saw through the lies about caring about the less privileged and now both parties have hung your class out to dry. Pardon the rest of us if we enjoy watching you get your comeuppance.

    #1711026

    CTLAWYER
    Participant

    @joseph
    You do not owe me an apology
    You just seemed to forget that I am not one of those who goes away for Pesach, on cruises or lavish vacations.
    Both of our daughters were married at home in our gardens, not in a lavish wedding palace.

    Your question would be a fair one if I spent money on lavish things and cut tzedaka, but it is not the case in this situation.

    BTW….10K in state taxes (combined sales, property and income), does not mean one is wealthy in the northeast. and seniors such as myself no longer have dependent children to deduct as many 30 and 40 somethings do. No mortgage interest either. AND in our case the new standard deductions have cut way back on medical deductions, even though Mrs. CTL has had ongoing major expenses. The new Trump tax plan benefits mostly the super rich and throws a small bone to the working middle class who live in low tax states.

    The point of my OP is not to complain about paying more taxes, but to show the consequences of the new plan on the charitable industry.

    #1711041

    CTLAWYER
    Participant

    @anisraeliyid
    I was/am not subject to AMT
    I have no children to deduct (I’m over 65)
    I pay property tax on multiple properties here in CT (each one more than 10K), I pay state income tax, fire taxes, sales tax as well.
    Mrs. CTL has had catastrophic medical issues with accompanying high costs. The new much higher threshold for deducting this has changed my taxes as well.
    Having now completed the first year’s tax returns, and getting a grasp on the changes (no I wasn’t going to read the complete tax code), I am in the process of changing ownership structure of a number of properties.

    #1711052

    lakewhut
    Participant

    Israeli Yid state taxes were a big portion of people who itemized in blue states. CT has high property taxes.

    #1711053

    lakewhut
    Participant

    CTL should switch his law firm to an S Corp and be exempt from SE tax.

    #1711118

    CTLAWYER
    Participant

    @lakewhut

    Don’t give advice about which you know nothing!
    I can’t switch my law firm from an ‘S’ Corp when it has never been one. In General, law firms are not corporations. They are partnerships, sole proprietorships or limited liability companies. An non-attorney may not have an ownership interest in a law firm in most US jurisdictions. This no widow or ex-wife could end up with a piece of the firm in a death or divorce.

    In my case, until 2018, the Law Offices of CTL was a sole proprietorship. Once the last of my children had passed the bar and joined the family practice I established several net partnerships, one for CT and another for each out of state office. Not all my kids are licensed in all 4 states where I am.

    #1711137

    lakewhut
    Participant

    You should pay more taxes. If you can pay it, then you’ve made it.

    #1714421

    justme22
    Participant

    @ctlawyer I’m self employed . I had no group plan before or after ACA..( Individual plans all along )

    #1714423

    justme22
    Participant

    If my plan became so much more pricy with a subside I can’t even begin to imagine for a family that has enough money not to qualify for subsidies

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