Tax Cuts and Jobs Act

[Trotsky]

LOL, this was my exact reaction.

Also, I have to hear more about how this interacts with existing state tax deductions. If they are doing what they talked about, it would cripple successful liberal sates like Minnesota, New York, California.

 

[Anung Un Rama]

No he gave American Citizens a tax cut.

If American Citizens is the name of an alt-right non-profit group that wants to donate heavily in the next election.

 

[PolishHeadlock]

That's garbage. I really hope none of this passes. It hurts any middle to upper class taxpayers from states that pay high state taxes.

It's also nowhere close to revenue neutral which means no infrastructure spending bill any time soon.

 

[konagold]

HAHAHA...great to see trump never lost his sense of humor. Fukking over all of his maga-maniacs in order to line his own pockets.

No carried interest reform - MAGA!
No alternative minimum tax - MAGA!
No estate tax - MAGA!
Cuts taxes on pass through entities (real estate partnerships for example) - MAGA!

 

[Jorge Luis Borges]

Son of a bitch. Why allow a deduction for property tax but not income tax?

In a sense, allowing deductions for state and local taxes is a federal subsidy for localities with high taxes.

Not sure why they allow the deduction for property tax though.

 

[PolishHeadlock]

In a sense, allowing deductions for state and local taxes is a federal subsidy for localities with high taxes.

Not sure why they allow the deduction for property tax though.

And if your for small government wouldn't you want more of the tax dollars going to the state as opposed to the Fed?

 

[panamaican]

Why do they oppose? It is standard procedure with my crowd. Most friends an I even have their business rent the building from the LLC also own even if owner occupied.

Experienced investors do it without thinking. But newer clients are sometimes hesitant for a variety of reasons. It's always good to have another tool to help them make the right decision.

 

[VivaRevolution]

You get a tax cut, you get a tax cut, you get a tax cut, and you get a 700 billion defense spending bill.

Why didn't anyone else ever think of this.....

 

[Jorge Luis Borges]

And if your for small government wouldn't you want more of the tax dollars going to the state as opposed to the Fed?

Sure, but it also means that citizens of low tax states like Florida are in effect subsidizing citizens of high tax sates like Massachusetts.

 

[Rod1]

In a sense, allowing deductions for state and local taxes is a federal subsidy for localities with high taxes.

Not sure why they allow the deduction for property tax though.

Why? doesnt that amounts to a double taxation?

 

[Rod1]

Sure, but it also means that citizens of low tax states like Florida are in effect subsidizing citizens of high tax sates like Massachusetts.

https://mises.org/blog/which-states-rely-most-federal-spending

Spoiler

 

[44nutman]

The non-partisan Tax Foundation reports that their "results indicate a reduction in tax liability for every scenario we modeled, with some of the largest cuts accruing to moderate-income families with children and fixed-income retirees. Individuals with pass-through income also benefit substantially from the lower pass-through rate."

https://taxfoundation.org/gets-tax-cut-tax-cuts-jobs-act/

Wood , Laura.

 

[Revolver]

Sure, but it also means that citizens of low tax states like Florida are in effect subsidizing citizens of high tax sates like Massachusetts.

Not really since they've allowed residents of these states to deduct sales taxes.

 

[44nutman]

Wonder what "several rules they'll place to prevent abuse". Will they eliminate the need for S-Corp owners to pay themselves a reasonable salary in order to avoid payroll taxes? As well as having general partners in partnerships and LLC's report income earned as self employment?

As an S corp owner. What I pay myself in salary is way less than what I earn. That fucking FICA is a bitch for self employed.

 

[Revolver]

As an S corp owner. What I pay myself in salary is way less than what I earn. That fucking FICA is a bitch for self employed.

According to current IRS you're supposed to pay yourself a "reasonable salary". What does that mean? Well it's up to interpretation depending on the amount of work and industry. Be careful on this since IRS can bust the S election if they feel like you were purposely trying to avoid paying payroll taxes.

 

[PolishHeadlock]

Sure, but it also means that citizens of low tax states like Florida are in effect subsidizing citizens of high tax sates like Massachusetts.

That's not necessarily true in the Net effect. Florida relies on more Federal aid as a part of their state budget and gets a lot more money back compared to what they pay into the Fed

https://www.theatlantic.com/busines...tates-are-givers-and-which-are-takers/361668/

https://taxfoundation.org/states-rely-most-federal-aid/

 

[44nutman]

According to current IRS you're supposed to pay yourself a "reasonable salary". What does that mean? Well it's up to interpretation depending on the amount of work and industry. Be careful on this since IRS can bust the S election if they feel like you were purposely trying to avoid paying payroll taxes.

I have an accountant. He keeps me in check.
If it was up to me I would pay myself about 3 fiddy a week.

 

[HIMBOB]

Anyone found a good review article or piece?

 

[Lubaolong]

According to current IRS you're supposed to pay yourself a "reasonable salary". What does that mean? Well it's up to interpretation depending on the amount of work and industry. Be careful on this since IRS can bust the S election if they feel like you were purposely trying to avoid paying payroll taxes.

You're a CPA? I have a wall of questions, if you don't mind. Feel free to PM if you don't want to answer publicly. Do you have a rough rule of thumb regarding earnings paid as salary? Say you do 10 hours a week running a concierge type service that caters to high earners paying in cash. Even if you are making much more per hour than average, can you take the local market average for 40 hours / 4 and take that as your pay? Does it not look a little shady if earnings paid as a dividend = or > salary? How would one find a good CPA? I assume not all of them will have the same experience (partner buy-ins, solo-401ks, malpractice) What benefits do you provide beyond tax deductions? Can you explain why I should use a CPA? I've heard self-prepared higher earners are much more likely to be audited vs CPA assisted. Is this true? How do you help clients during an audit? How often do you meet with clients? You follow with them throughout the year? What's the average cost for CPA services?

 

[chardog]

You're a CPA? I have a wall of questions, if you don't mind. Feel free to PM if you don't want to answer publicly. Do you have a rough rule of thumb regarding earnings paid as salary? Say you do 10 hours a week running a concierge type service that caters to high earners paying in cash. Even if you are making much more per hour than average, can you take the local market average for 40 hours / 4 and take that as your pay? Does it not look a little shady if earnings paid as a dividend = or > salary? How would one find a good CPA? I assume not all of them will have the same experience (partner buy-ins, solo-401ks, malpractice) What benefits do you provide beyond tax deductions? Can you explain why I should use a CPA? I've heard self-prepared higher earners are much more likely to be audited vs CPA assisted. Is this true? How do you help clients during an audit? How often do you meet with clients? You follow with them throughout the year? What's the average cost for CPA services?

ugh, get yourself a CPA, you'll probably end up asking these questions again...

Use them if you're self employed and have to do payroll. They prepare the checks for you, and it was fairly inexpensive from what I recall, unless you find some gouging prick. They take care of you start to end, including audits and should work with you on a weekly/bi-weekly basis. If you're doing any form of estimation, stick with a CPA, better if they fiddle the numbers for you.