FWIW, property tax is typically a local tax, not a state tax. Illinois does not have a state property tax, and around 2/3 of property taxes go to fund school districts.
I still live in the house we bought in 1976. We added two bedrooms and a family room after we had kids. It is not a mansion, but we live in DuPage County, in a town on one of the commuter rail lines. My property tax bill is around $19,000. More than some neighbors, less than others. Add the state taxes, and the $10,000 cap on SALT means I will be paying federal tax on at least $10K that I didn’t pay tax on last year and that I never received as disposable income. My wife died 2 years ago so my standard deduction is $12K not $24K. Yes that is higher than last year, but that’s cancelled out by the personal exemption going away. I have one kid who lives with me, but that doesn’t help me with taxes. Lots of people, especially seniors, are probably in the same situation as me. If you don’t have a large income so you can pay the substantially higher taxes, the federal government is essentially telling you that you have to move out of your house. And I think for a lot of people the withholding tax formulas didn’t properly account for this change. I think you are oversimplifying this as we’re finally sticking it to the state governments who spend and tax too much. In the case of property tax, it’s not even a state tax. And it’s not like property taxes were invented yesterday or during the administration of <fill in whatever President you didn’t like>. Like I say, I’ve lived here for over 40 years, paid property taxes the whole time, but I didn’t then also pay income tax on that money that I never got to spend. It’s not taking any money away from the state of Illinois, and it has no effect on the state’s spending or taxing decisions. It just takes several thousand dollars out of my wallet. The other thing I’m going to have to discuss with my accountant is the S Corp pass through change. It could be really stupid now for my company to be paying me a salary, maybe a distribution would be the way to go. I’m not sure. I always tried to do the right thing and pay myself a reasonable salary so the government could get their various payroll taxes, but maybe I’m being a moron. From: AF <af-boun...@af.afmug.com> On Behalf Of Steve Jones Sent: Monday, April 1, 2019 4:16 PM To: AnimalFarm Microwave Users Group <af@af.afmug.com> Subject: Re: [AFMUG] OT: Tax cut my ass... the state has their right to do as they please, but they dont have the right to do it on the feds back. why arent the states offering credits on federal taxes? On Mon, Apr 1, 2019 at 2:29 PM Carl Peterson <cpeter...@portnetworks.com <mailto:cpeter...@portnetworks.com> > wrote: Whatever happened to states rights? The states have a right to decide what level of service/taxation they like. What it BS is the federal government taxing you on money that you never made because it was taxed at the state level. On Mon, Apr 1, 2019 at 11:06 AM Steve Jones <thatoneguyst...@gmail.com <mailto:thatoneguyst...@gmail.com> > wrote: Im glad they dropped the SALT to 10 percent. I wish they would phase it out to zero. Force the states to get their houses in order, force people to make more sound decisions in both purchases and in whom they check off at the ballots. No more raising taxes and saying, its all good, you can write it off on your federal. On Mon, Apr 1, 2019 at 1:53 AM Forrest Christian (List Account) <li...@packetflux.com <mailto:li...@packetflux.com> > wrote: One gotcha I found with my taxes (when doing the estimates for the extension) is that many preparers and tax software don't handle the pass-through entity deduction correctly. If you have a s-corp or a partnership or a LLC or similar which passes through it's income to you, then in many cases up to 20% of this can be written off regardless of what else is going on on your return. I.E. it's a separate deduction from either your standard or itemized deduction. I though I was getting hit really hard until I figured out that this hadn't been applied correctly. On Sun, Mar 31, 2019 at 8:32 PM Ken Hohhof <af...@kwisp.com <mailto:af...@kwisp.com> > wrote: > > All state and local taxes (SALT) limited to $10K deduction so income tax, > sales tax, and property tax. Trust me, it's not hard to exceed $10K in > property taxes alone. Also property tax is typically local, not state, and > in many areas is the primary means of funding public schools. > > Real estate tax on farmland used for crops and livestock is still 100% > deductible. > > > -----Original Message----- > From: AF <af-boun...@af.afmug.com <mailto:af-boun...@af.afmug.com> > On > Behalf Of Bill Prince > Sent: Sunday, March 31, 2019 8:41 PM > To: af@af.afmug.com <mailto:af@af.afmug.com> > Subject: Re: [AFMUG] OT: Tax cut my ass... > > Yeah, our taxes don't reach that threshold. Mainly because we bought our > house over 2 decades ago, and Prop. 13 keeps the valuation from rising too > fast. > > > bp > <part15sbs{at}gmail{dot}com> > > On 3/31/2019 6:22 PM, Seth Mattinen wrote: > > On 3/31/19 5:03 PM, justsumname wrote: > >> The IRS website shows what changed. Tax rates did in fact go > >> down... but deductions were eliminated and/or capped lower and so > >> that's where the sticker shock is coming from. Itemized deductions > >> were capped at 10k for example, if I remember correctly. > >> > >> Two observations ... a very broad brush summary: > >> > >> --no longer are people with big mortgages being tax-subsidized by > >> people with smaller mortgages --no longer are States with low(er) > >> property taxes tax-subsidizing States with high(er) property taxes > >> > > > > > > State and local income tax is capped at $10k deduction. > > https://www.irs.gov/newsroom/tax-reform-brought-significant-changes-to > > -itemized-deductions > > > > > > Mortgages are capped at $750k for new mortgages after Dec 31, 2017. > > https://www.irs.gov/publications/p936 > > > > -- > AF mailing list > AF@af.afmug.com <mailto:AF@af.afmug.com> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com > > > > -- > AF mailing list > AF@af.afmug.com <mailto:AF@af.afmug.com> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- - Forrest -- AF mailing list AF@af.afmug.com <mailto:AF@af.afmug.com> http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- AF mailing list AF@af.afmug.com <mailto:AF@af.afmug.com> http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- Carl Peterson PORT NETWORKS 401 E Pratt St, Ste 2553 Baltimore, MD 21202 (410) 637-3707 -- AF mailing list AF@af.afmug.com <mailto:AF@af.afmug.com> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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