Anyone else prepaying property taxes so you can still deduct them this year?

[cruiser21]

I would be happy to get a bonus no what my company’s motive! I guess if you are so financially secure that a few thousand dollars doesn’t matter to you then that’s a different world than I live in. We would be (and are) very grateful for a bonus, a raise or a tax cut in any shape or form! Keep em coming!

1 million people getting a thousand dollar bonus is 1 billion being injected into the economy. I would use it to upgrade my parkhoppers to annual passes. My dh I'm sure would buy a tv. Some people may use it to pay down debt, but I'm sure a lot of people would splurge and buy something they hadn't planned on. We're middle to upper middle class and I'd be thrilled to a thousand bucks.

 

[Hikergirl]

Count me in as one of the middle class who will have to pay more in taxes next year, between $3000-$4000. Having a child in college, and losing the individual exemptions is going to hit us hard. They say one of the groups who will fare the worst — whose taxes will increase — are middle/upper middle class parents of college students.

It’s frustrating to hear how “family-friendly” this bill is. It’s not, and it wasn’t designed to be.

Upper middle class families have always been phased out of taking this deduction.

 

[MomToOne]

Upper middle class families have always been phased out of taking this deduction.

The college tax credit phases out at middle/upper middle income levels, but the personal exemption phase out (which the poster was referring to) didn't happen until much higher income levels so many families with college students were still able to take the full amount. For families with children older than 17, losing the personal exemption of over $4k+ for them can be a hard hit - this is especially true for families with more than 2 kids. The $500 you now get in a dependent "relative" credit is not a very equivalent replacement.

 

[punkin]

No. It's not, but having run the numbers for my family, we will be about even to where we were.

 

[Hikergirl]

The college tax credit phases out at middle/upper middle income levels, but the personal exemption phase out didn't happen until much higher income levels so many families with college students were still able to take the full amount. For families with children older than 17, losing the personal exemption of over $4k+ for them can be a hard hit - this is especially true for families with more than 2 kids. The $500 you now get in a dependent "relative" credit is not a very equivalent replacement.

I know, I'm one of those families, 3 kids here, and not only do we lose our personal exemptions we also lose our state income tax deduction as well. As far as the child credit, we will actually get a full credit in 2018, something that hasn't happened in years as dh's salary has risen. I will have 2 in college next fall, but we wouldn't be able to claim any deduction for that because of dh's income anyway.
But still when running the numbers we do not end up having to pay an additional $3-4K in taxes. Which honestly surprised me, because when I heard about losing all the deductions we would normally itemize I assumed that would be the case.
The way the new brackets are structured helps to offset that, for us anyway.

My point to the OP was that there are many things that we in the mid to upper middle class have never been able to take advantage of, so getting "hit" is nothing new to us, we've always gotten the shaft for certain things. Unfortunately that is how it is, some people are going to come out winners and some losers, no different than if this tax plan never passed.

 

[havaneselover]

Count me in as one of the middle class who will have to pay more in taxes next year, between $3000-$4000. Having a child in college, and losing the individual exemptions is going to hit us hard. They say one of the groups who will fare the worst — whose taxes will increase — are middle/upper middle class parents of college students.

It’s frustrating to hear how “family-friendly” this bill is. It’s not, and it wasn’t designed to be.

The numbers I have read say 5% will see an increase, 80% a decrease. So for the vast majority of families, it is helping them.

 

[MomToOne]

The numbers I have read say 5% will see an increase, 80% a decrease. So for the vast majority of families, it is helping them.

Ok - what am I missing? That only adds up to 85% - are the other 15% just going to stop paying?

 

[cruiser21]

I figure when my kids go to college I'll be paying the same as I'm paying now or a little more. I like the fact that it's simpler and fairer. I've never liked the fact that I pay more then someone making the same income just because I live in a cheaper house. I always thought we should have a flat tax. This will probably be as close as we'll get to that.

 

[cruiser21]

Ok - what am I missing? That only adds up to 85% - are the other 15% just going to stop paying?

There is a large percentage of people that pay no tax so where do they fit in. I'm sure they make up a big portion of the no change.

 

[bdcp]

There is a large percentage of people that pay no tax so where do they fit in. I'm sure they make up a big portion of the no change.

Not only do they pay no tax, they get a refund based on credits so those of us that do pay are subsidizing them. As of 2015, it was 45%, almost half pay ZERO taxes.

 

[wendow]

15% will basically see no change.

I kind of think this will be us. The loss of medical deductions and personal exemptions will affect us. BUT I am happy that so many will benefit from this bill because many of those people will put their extra income back into the economy which ultimately, helps all of us.

 

[Mackenzie Click-Mickelson]

I kind of think this will be us. The loss of medical deductions and personal exemptions will affect us. BUT I am happy that so many will benefit from this bill because many of those people will put their extra income back into the economy which ultimately, helps all of us.

To the bolded that part I'm not sure about. That implies we know for certain people will actually spend their money or at least a significant amount of money to make a difference. Truly after the recession for many their spending habits changed. From what Business Insider says the experts believe the economy would be helped in a small and short-term way.

According to the Business Insider article I read "Nearly every analysis said the economic impact would fade. Goldman said the increased GDP could dissipate after 2020 and then actually become a drag on the economy. The JCT (Joint Commitee on Taxation) said that wouldn't happen until the second decade."

So I guess moral of the story is...it's doubtful that long-term economic growth would come from this. I too would like people to inject money into the economy by spending their extra income but ever since the Recession it's just not the same thought.

I do think it's great that the vast majority of people would benefit from this at least in some way.

 

[wendow]

To the bolded that part I'm not sure about. That implies we know for certain people will actually spend their money or at least a significant amount of money to make a difference. Truly after the recession for many their spending habits changed. From what Business Insider says the experts believe the economy would be helped in a small and short-term way.

According to the Business Insider article I read "Nearly every analysis said the economic impact would fade. Goldman said the increased GDP could dissipate after 2020 and then actually become a drag on the economy. The JCT (Joint Commitee on Taxation) said that wouldn't happen until the second decade."

So I guess moral of the story is...it's doubtful that long-term economic growth would come from this. I too would like people to inject money into the economy by spending their extra income but ever since the Recession it's just not the same thought.

I do think it's great that the vast majority of people would benefit from this at least in some way.

I said "many" and I still believe that. People just aren't savers like previous generations. We get extra money and we spend it. Not sure which direction Business Insider leans...

 

[Mackenzie Click-Mickelson]

I said "many" and I still believe that. People just aren't savers like previous generations. We get extra money and we spend it. Not sure which direction Business Insider leans...

In this case where they lean wouldn't matter much as they are just listing what the organizations are stating but as far as media biases go they have a high factual rating. Of course parts of what they are stating later on in the article (as many other sources) could have a lean towards one way. Basically the point that I'm getting from places is it's not a sure thing or it may not be as much as hoped for economic growth.

People aren't necessarily savers true but they don't spend their money the same way as before. Where people spend their money is going to depend if there is economic growth. If you chose to fix your car on some repairs you've been putting off while you may be assisting the economy it's probably in a lesser sense and more localized than if you were going on a vacation somewhere. If you choose to pay down debt rather than spend on shopping that's not going to help the economy in the same way. People don't buys cars for example as much as they used to, they hold on to them for longer. Now perhaps if a family who under the new tax bill has some good extra income they may choose to go on vacation, they may choose to get a brand new car, etc but it's just as ikely they will be spending their money in a different way than before and that may or may not actually be helping out the economy in a significant long-term way.

 

[wendow]

In this case where they lean wouldn't matter much as they are just listing what the organizations are stating but as far as media biases go they have a high factual rating. Of course parts of what they are stating later on in the article (as many other sources) could have a lean towards one way. Basically the point that I'm getting from places is it's not a sure thing or it may not be as much as hoped for economic growth.

People aren't necessarily savers true but they don't spend their money the same way as before. Where people spend their money is going to depend if there is economic growth. If you chose to fix your car on some repairs you've been putting off while you may be assisting the economy it's probably in a lesser sense and more localized than if you were going on a vacation somewhere. If you choose to pay down debt rather than spend on shopping that's not going to help the economy in the same way. People don't buys cars for example as much as they used to, they hold on to them for longer. Now perhaps if a family who under the new tax bill has some good extra income they may choose to go on vacation, they may choose to get a brand new car, etc but it's just as ikely they will be spending their money in a different way than before and that may or may not actually be helping out the economy in a significant long-term way.

I don't think any of us really can say how people will spend their money. I know two of my aunts are TA's and both say they have never been as busy as this last year. Lots of people going on trips and not budget-conscious trips but going all out. One of my aunts is going on a 12-night (or is it 15??) New Zealand cruise. She has never done anything like that before but says business has never been as good as in the last year so she has made great money.

None of us know how people will spend their extra money but I don't think most will save it. This is the budget forum and most here operate completely different than the average Joe out there. Most average Joe's are in debt up to their eyeballs and aren't really looking to change that.

 

[bdcp]

We're going to redo our master bathroom and any tax savings we get will go towards that. Money will go back into the economy. Most people who have extra money spend it. I know plenty of people, even on the budget board, will probably take a different vacation than normal or buy things they wouldn't normally buy, because they will have the extra. Some will save some, but not all of it. That's just not how the vast majority of people operate.

As for depending on economic growth. We are having economic growth. Home sales are up, spending is up, income is up, the market is up a lot, not sure what people are looking for.

 

[focusondisney]

Not only do they pay no tax, they get a refund based on credits so those of us that do pay are subsidizing them. As of 2015, it was 45%, almost half pay ZERO taxes.

I've been doing the subsidizing. I hope that calculator posted earlier is right. According to that, we'll save about $4000. While we live in a high tax state, we have 2 incomes, no mortgage, no kids at home. Our only deductions have been our taxes. I guess the higher exemption & lower tax rate will help us. I'd love to keep more of my money. Won't be happy if the national debt increases, but I am tired of everybody but me getting a break.

 

[focusondisney]

We're going to redo our master bathroom and any tax savings we get will go towards that. Money will go back into the economy. Most people who have extra money spend it. I know plenty of people, even on the budget board, will probably take a different vacation than normal or buy things they wouldn't normally buy, because they will have the extra. Some will save some, but not all of it. That's just not how the vast majority of people operate.

As for depending on economic growth. We are having economic growth. Home sales are up, spending is up, income is up, the market is up a lot, not sure what people are looking for.

Everything seems great. But I had 3 family members lose their jobs in the last 18 months. One (who is in finance!) was unemployed for 13 months, finally got a job. The other 2 are still looking, 1 for 6 months & 1 for 18 months. So I guess, I'd say, people are looking for jobs!

 

[cruiser21]

In this case where they lean wouldn't matter much as they are just listing what the organizations are stating but as far as media biases go they have a high factual rating. Of course parts of what they are stating later on in the article (as many other sources) could have a lean towards one way. Basically the point that I'm getting from places is it's not a sure thing or it may not be as much as hoped for economic growth.

People aren't necessarily savers true but they don't spend their money the same way as before. Where people spend their money is going to depend if there is economic growth. If you chose to fix your car on some repairs you've been putting off while you may be assisting the economy it's probably in a lesser sense and more localized than if you were going on a vacation somewhere. If you choose to pay down debt rather than spend on shopping that's not going to help the economy in the same way. People don't buys cars for example as much as they used to, they hold on to them for longer. Now perhaps if a family who under the new tax bill has some good extra income they may choose to go on vacation, they may choose to get a brand new car, etc but it's just as ikely they will be spending their money in a different way than before and that may or may not actually be helping out the economy in a significant long-term way.

It was the biggest Christmas shopping season in history. Consumer confidence is soaring. I predict the bonuses will be spent.

 

[bdcp]

Everything seems great. But I had 3 family members lose their jobs in the last 18 months. One (who is in finance!) was unemployed for 13 months, finally got a job. The other 2 are still looking, 1 for 6 months & 1 for 18 months. So I guess, I'd say, people are looking for jobs!

Finance has always been a volatile career field. Knowing a person or two who are looking for job doesn't mean there aren't jobs. It may mean in their field it's more difficult to find one. Unemployment is currently 4.5% which is usually considered full employment. Your post is a glass half empty approach and you're only looking at a few people. How many people are in your family? 3 out of how many are looking? Every single person in my immediate and extended family is employed so if I based my view of the economy on that, I'd say there's 100% employment. See my point?