2018 federal income tax anecdotes

TeamM, What are you hearing from your colleagues?

Don't have the full picture yet but my early estimates put my federal income tax rate +150 bps over 2017. Some puts and takes between the years but generally comparable. Married and ~95% wage income.

https://www.nbcnews.com/business/taxes/tax-code-changes-leave-americans-asking-what-happened-my-refund-n969366?cid=sm_npd_nn_fb_ma

Thank you. A couple of stories are people losing out of pocket expense deductions which were always a little shady. For the postal worker / pizza delivery guy, it seems that he lost more than 15k of these shady deductions for his refund to reduce $5500.

I think the bigger issues for NYC than the net impact on their individual situations is there relative situations to people in other states. The gap has widened considerably. I know several people who have decided that this was the straw that broke the camel's back and they've moved elsewhere.

Probably a wise decision for people who are not working in NYC. Florida is a key beneficiary as it has been for years of people moving out of NY/NJ.

I moved out in 2014 - never imagined how fortuitous the timing would be... I assumed continued escalation in property taxes and other general cost of living expenses, but never envisioned the SALT issue as it exists today.

I have a couple of acquaintances who are tax preparers and they both said that wage earners are losers and self employed are winners under the new tax scheme.

https://www.wsj.com/graphics/tax-calculator-2019/?mod=mhp

I tried this one for $500k and $1mm W2 married 1 or 2 children, assuming $2mm apt for the first case - $20k property tax and $3mm - $30k property tax for the second case. $30k mortgage interest. I get barely any extra taxes less than 1 percent. In fact, the taxes are lower for $500k.

For $1mm, $13k increase $110k state and city taxes paid.

TeamM, Does the calculator line up with your actual? The calculator’s local tax estimate does not include NYC tax. So one needs to adjust by 3.5-3.7 percent for that.

For $500k, I get $12k decrease in taxes.

I am really not sure how any NYC working class who owns a home can possibly see tax deduction. The state income tax alone is already over 10K (assuming modest household income of 500K), the SALT limit.
Therefore any property tax is NOT deductible; hence doesn't matter what size/tax your property is. No tax benefit. I personally see 50K less in itemized deduction just from SALT cap alone. Can anyone shed any light or share the changes you see?

The decrease is from lowering of federal tax rate and moving up the brackets slightly.

The decrease is from lowering of federal tax rate and moving up the brackets slightly. That offsets decreased deductions at lower incomes.

Thanks 300_mercer. Your statement is correct regarding the tax bracket (decrease) for household income of 500K.
I compared the tax brackets for 2017 and 2018. The only income groups that see INCREASE in federal tax rate are Single making 200-400K and Married File Jointly 400-416K. Both see federal rate changed from 33% to 35%.... I think these income levels are very much typical coastal earners...
I'd say GOP got what they wanted.