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Originally posted by at-home-daddy:

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Originally posted by Rey HRH:


People are only surprised if they don't understand numbers. I'm just stating a fact and not trying to bust your balls but you don't understand numbers.

Not going to get in a debate over my aptitude for numbers, but before one makes a claim about others, they should be careful they don’t have a myopic view that relies too much on base numbers and not overall context. For example:

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Here are the facts:
Fact 1:
Tax rates were reduced across the board. . .
If tax rates were reduced across the board, the tax liability for the same amount of income is going to be less in 2018 than it was for 2017.

I am aware of that. However, in my case, my *effective* tax rate went up at 2%. Attractive base tax rates don’t tell the story in a complex return.

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Fact 2:
The standard deduction for Married Joint return in 2017 was $12,700. For 208, it is $24,000. If your itemized deductions is less than $24,000 then you are getting a BIGGER deduction in 2018 than in 2017. For example, if your itemized deductions is $23,000 then in 2017, you reduced your taxable income by 23,000. But in 2018, you reduced your taxable income by $24,000. Your taxable income for 2018 is now less and is subject to even lower rates.

It’s important not to have tunnel vision on that $24K. A personal Married FJ deduction that was combined with itemized deductions has been replaced by a smaller standard deduction. If one’s itemized deductions are a dollar under $24k, they’ve lost $12,700 in deductions.

There were some issues outside the new tax structure that impacted our return (most notably the Child Tax Credit reduced to Other Dependent credit for our two 18+ children), but the new plan certainly didn’t help offset those issues in the way that someone just looking at attractive base rate reductions might believe.

1) You say people should be careful to not have a myopic view that relies too much on base numbers and not overall context.

I refer you to your OP where, to my point of view, you myopically focused on the $24K standard deduction as the crux of your woes. You said, "I just finished our taxes for 2018, and the $24K standard deduction formula was absolutely brutal for us. We usually get around $4500 back, and this year we will be paying $1744, making '18 the first year in I can't-remember-how-long (possibly ever) that we owe. Property taxes, mortgage interest, investment advisor fees, charitable contributions, etc. etc....all of it, it's all moot if you don't have total deductions in excess of $24K. We were close at around $23K, but not quite there"

That's all I can go by. That's the heart of what you said. And when I read that, I go, "How can anyone complain of the $24k standard deduction because they have only $23k in itemized deductions?" Under the old rule, if you had $23k in itemized deductions, you took $23k in deductions. But under the new rule, if you have $23k in itemized deductions, you get to take $24k in deductions.

Star Traveller appears to understand what you were saying and it has to do with personal exemptions. Since you incorrectly attributed the 24k standard deduction as driving your tax issue and not personal exemptions, you can't fault me for saying you don't understand numbers because that's what understanding numbers mean: correctly identifying the drivers of the numerical result.

You also say "Attractive base tax rates don't tell the story in a complex return." Yes, but there is a concept called cetus paribus which analyzes things one at a time while holding everything else constant. And, in any case, you can't give part of your situation and then fall back on "it's way more complex than that" if you don't like what's said to you.

The only way, you could make a definitive comparison is to run your current numbers against the 2017 tax rules and you can see the total difference and you can determine where the differences lie. It does appear you have narrowed it down to the personal exemption which you didn't mention in your OP. But I still think plugging your numbers into the 2017 program will be a worthwhile exercise.

What are these "taxes" of which you speak???


..........And why do I hear helicopters above my house that I can't see???



Just kidding, our CPA has our info. Yes, I agree with certain people above that owning a business is not always fun.