Trump's tax breaks broke my checkbook

[riversedge]

I have not done mine. But I know a few who have to pay in when they expected a refund.


Trump’s tax breaks broke my checkbook
e



What I deduce in lack of deductions

Tax returns

My wife and I just completed our 2019 tax returns, and it appears that we are going to be paying a small fortune. Can I deduct a portion of our mortgage interest? No, not like prior to 2019. I am a full-time employee of an international medical health-care company, and I work remotely out of my home. Can I still deduct that portion of my home office prorated against the total square footage of my house from my taxes? Not a chance. Is my internet service deductible? No way. My business phone? Don’t ask. Office supplies. Ditto. How about that portion of my medical bills that exceeds what my company health-care benefits provide? Fahgettaboudit! Charitable deductions? No, not anymore. We are not beneficiaries of President Donald Trump’s tax cuts.

[fleabiscuit]

1. Wow. Yes. Most Americans aren't beneficiaries of Dump's tax ripoff. nt

Edit: Me included.

[rufus dog]

2. It hit people last couple of years

Thus the Dem pick ups in the House. So California, New York, New Jersey folks saw it. You want to know where else. TEXAS. No state income tax but high property taxes.

[Hoyt]

3. Sure you can deduct charitable contributions, unless you haven't used up

the Standard Deduction. In that case, you are no worse off. So, please give. I’d suggest to cancer or something.

[TreadSoftly]

8. fyi - at one point in 1040 history, there was a line for Charitable without itemizing

I have an old 1040 form from 1985. On page 2, there is a line to enter charitable deductions, right after adjusted gross, to reduce income subject to tax. If the taxpayer gave more than $3k to one organization, another form was to be filled out. There is a line for non-cash donations too.

I do not know why it appeared and why it disappeared, but in reviewing that, the line devoted to charitable deductions on every return feels like the right solution for a country whose citizens like to help others.

[onenote]

11. It's true that in1985 you c ould deduct charitable contributions even if you didn't itemize

But only one half of the amount.
See line 34e on the 1985 Form 1040:https://www.irs.gov/pub/irs-prior/f1040--1985.pdf

[TreadSoftly]

13. Good catch! You are correct...one half.

Good catch! Thanks, onenote! I was able to confirm your post in the Instructions https://www.irs.gov/pub/irs-prior/i1040--1985.pdf.

These days, they'd have another form or worksheet. The IRS do like to annoy us with number puzzles.

[TreadSoftly]

14. line 44 of 1985 taxes: up to $50 for political contributions

Interesting:

Line 44
Partial Credit for Political Contributions for Which You Have Receipts

You may take a tax credit on this line for contributions to candidates for public office and to newsletter funds and political committees of candidates and elected public officials.

Caution: Do not take this credit for the $1 or $2 you checked to go to the Presidential Election Campaign Fund.

To figure your credit, add up the amounts you gave. Enter half of this total on line 44, but do not enter more than $50 ($100 if you are married and filing a joint return).

Note: you cannot deduct political contributions as charitable contributions.
...

[PoindexterOglethorpe]

4. I do know the standard deduction was increased while certain itemized ones went away.

I'm actually one of those who benefits from that change, because I didn't have much to itemize, so the higher standard is good for me.

[sinkingfeeling]

5. Wait until some more folks inherit a big IRA and have to take all

of it over 10 years and pay the extra income tax.

[Hoyt]

9. I'll take a $100,000 IRA and pay the $25,000 in taxes with a smile.

[keithbvadu2]

6. You're not one of Trump's beloved 0.1%.

You're not one of Trump's beloved 0.1%.

[uponit7771]

7. We have more than 2 children, we got royally screwed by Trumps taxes

[onenote]

10. The description in the OP sounds like BS to me.

Last edited Fri Feb 21, 2020, 07:26 AM - Edit history (1)

The changes in the tax law took effect for the 2018 tax year. The impact on 2019 tax returns shouldn't come as a shock to anyone who paid taxes in 2018. For example the change in the mortgage interest deduction took effect for the 2018 tax year, so the OP claim that they can't deduct a portion "like prior to 2019" is simply wrong. Moreover, the change in the mortgage interest deduction essentially capped the amount that could be deducted based on the size of the mortgage. It used to be that you couldn't take interest on mortgage debt above $1 million. Now its $750,000. Excuse me if my heart doesn't bleed for someone with a mortgage of R750,000. And the new lower cap only applied to new mortgages, so unless the family in the OP got a new $1 million mortgage, the change didn't impact them.

In short, the tale told by the family in the OP sounds like so much BS.

https://www.marketwatch.com/story/the-10-tax-law-changes-that-will-most-affect-your-2018-personal-return-2019-01-22

[mnhtnbb]

12. I just finished my taxes yesterday

and I will be paying both the Feds and the State. The majority of my income is Social Security widow's benefits and survivor's benefit of a Fed civil service pension.

I had been making quarterly prepayments, but apparently they were not enough. I owe substantially more than one of the quarterly payments to both the Feds and the State.

It pisses me off greatly that my tax payments are supporting golf trips for the Russian puppet and locking children in cages at our borders.

On edit: my circumstances changed dramatically in the last two years and were reflected in a change of filing status. Going forward, my situation has stabilized, so at least I should be able to better match my quarterly prepayments to my total tax obligation.

[TreadSoftly]

15. I hope things go better next year for you

I am so sorry for however you ended up with the filing status change. Always a surprise. I don't know why planners and administrators don't advise you to look at withholding. I guess there are too many factors for them to advise so they say nothing.

I like the IRS withholding estimator. I've been running through it with more clients than usual this year. The computation prevents them from withholding too much, out of fear. You can run the estimator any time that is estimate what to do with the rest of the year.

https://www.irs.gov/individuals/tax-withholding-estimator

The tax change was hellish last year. Very little notice and guidance. Included at least one extra rule that no one noticed, applying to states that didn't take Medicaid from the feds. Rewarded red states and punished blue states IMHO.

[mnhtnbb]

16. Thanks.

Due to circumstances, I used an accountant last year. He even screwed up my return, which I discovered when reviewing the packet after the taxes were filed. I had to fight with him to get him to file an amended return, because it made the difference between paying $800. and owing nothing. He hadn't treated my SS properly.

Anyway, he neglected to run the estimator, even though I gave him the numbers due to my change in status as a widow. So I did them myself, but neglected to adjust them when I sold some stocks mid year to take some profits. I won't do that again!

I went back to using TurboTax this year, which I had used for years doing joint taxes when married. At least I didn't have to pay an accountant.

[TreadSoftly]

17. Because you pay taxes quarterly...

I share this for you:

My favorite tool for computing quarterly payments is the "taxfed.xls" spreadsheet available at http://www.taxvisor.com/taxes/. Author Geoff Mendal has been posting these for years and I sing his praises every time I open my copy. Just remember to use the sheet that applies to your filing status. The only gap is no spot for SS. So when I am estimating for clients I just put in SS as "other income" at 85% and 50%. (At home, I have a separate sheet that feeds "Other Income" to include any income that he doesn't address).

As with any estimator, I recommend that you run it against last year to see how close you are. That will confirm that you understand how the estimator is working. No estimating tool is perfect but the hope is to get you within the $1,000-due safe harbor!

PS - Mendal always publishes a special sheet for California which I never explored.