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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 Personal exemptions repealed, but might be offset by bigger child tax credit.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 Medical expense deductions repealed.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 Many tax-advantaged employee fringe benefits repealed, like dependent care assistance & educational assistance.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 AMT repealed.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.

 

 

 

 

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Alvin Carlos, CFA, CFP®

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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