Prepay 2018 union dues to get deduction?

[IVE GOTTA PACKAGE 4U]

I've used the calculator. Says I will save $2200. I usually itemize but it looks like I will be using the standard deduction going forward.

Where did you find the calculator at?

 

[GameCockFan]

It seems to me that the increase in the child credit from 1,000 to 2,000 doesn't offset the loss of 4,050 personal exemption. Some families taxes bills will go up. Doesn't really affect me.

You Take a Personal Exemption
Well, pretty much everyone does. But that's about to end. For 2017, the exemption amount is $4,050 each for individuals, spouses and dependents, including children. This amount is not subject to any income tax at all. What it does is lower your taxable income.

Starting in 2018, that exemption goes away. The exemption’s elimination might actually offset the doubling of the standard deduction for families since deductions and exemptions both reduce your taxable income. Here are three examples:

You're Single, with No Children

Standard deduction increases from $6,350 to $12,000.

Personal exemptions decrease from $4,050 to $0.

Old tax break: $10,400.

New tax break: $12,000.

You're Married Filing Jointly, with No Children

Standard deduction increases from $12,700 to $24,000.

Personal exemptions decrease from $8,100 to $0.

Old tax break: $21,100.

New tax break: $24,000.

*If you itemized before, you got a $21,100 tax break for the standard deduction and your two personal exemptions, plus the amount you itemized, so you might not be coming out ahead under the new plan.

You're Married Filing Jointly, with Two Children

Standard deduction increases from $12,700 to $24,000.

Personal exemptions decrease from $16,200 to $0.

Old tax break: $28,900.

New tax break: $24,000.

*The difference is not entirely offset by the increase in the child tax credit from $1,000 to $2,000 per child.



Read more: How the GOP Tax Bill Affects You | Investopedia How the GOP Tax Bill Affects You

 

[GameCockFan]

Where did you find the calculator at?

It's linked in an post above. here's a link

Tax Bill Calculator: Will Your Taxes Go Up or Down?

 

[IVE GOTTA PACKAGE 4U]

It's linked in an post above. here's a link

Tax Bill Calculator: Will Your Taxes Go Up or Down?

Thanks brother.

 

[UpstateNYUPSer(Ret)]

I've used the calculator. Says I will save $2200. I usually itemize but it looks like I will be using the standard deduction going forward.

Keep in mind that these changes will kick in when you prepare your 2018 return in 2019.

 

[zubenelgenubi]

It seems to me that the increase in the child credit from 1,000 to 2,000 doesn't offset the loss of 4,050 personal exemption. Some families taxes bills will go up. Doesn't really affect me.

You Take a Personal Exemption
Well, pretty much everyone does. But that's about to end. For 2017, the exemption amount is $4,050 each for individuals, spouses and dependents, including children. This amount is not subject to any income tax at all. What it does is lower your taxable income.

Starting in 2018, that exemption goes away. The exemption’s elimination might actually offset the doubling of the standard deduction for families since deductions and exemptions both reduce your taxable income. Here are three examples:

You're Single, with No Children

Standard deduction increases from $6,350 to $12,000.

Personal exemptions decrease from $4,050 to $0.

Old tax break: $10,400.

New tax break: $12,000.

You're Married Filing Jointly, with No Children

Standard deduction increases from $12,700 to $24,000.

Personal exemptions decrease from $8,100 to $0.

Old tax break: $21,100.

New tax break: $24,000.

*If you itemized before, you got a $21,100 tax break for the standard deduction and your two personal exemptions, plus the amount you itemized, so you might not be coming out ahead under the new plan.

You're Married Filing Jointly, with Two Children

Standard deduction increases from $12,700 to $24,000.

Personal exemptions decrease from $16,200 to $0.

Old tax break: $28,900.

New tax break: $24,000.

*The difference is not entirely offset by the increase in the child tax credit from $1,000 to $2,000 per child.



Read more: How the GOP Tax Bill Affects You | Investopedia How the GOP Tax Bill Affects You

Tax credits are better than deductions, they directly reduce your tax liability rather than reducing your taxable income, and if your liability goes negative, you get a check for the difference (for a typical filer) . In the example you gave of married filing jointly with two kids, the difference between the new and the old is $4900. That means for that family their taxable income would be $4900 more, but their tax liability on that extra $4900 shouldn't come close to the extra $2000 in credits they would get, unless they are paying 40% income tax.

 

[BakerMayfield2018]

Tax credits are better than deductions, they directly reduce your tax liability rather than reducing your taxable income, and if your liability goes negative, you get a check for the difference (for a typical filer) . In the example you gave of married filing jointly with two kids, the difference between the new and the old is $4900. That means for that family their taxable income would be $4900 more, but their tax liability on that extra $4900 shouldn't come close to the extra $2000 in credits they would get, unless they are paying 40% income tax.

Credits help the lower class income more. Deductions help the upper class income more.

 

[zubenelgenubi]

Credits help the lower class income more. Deductions help the upper class income more.

No doubt about it.