Trumps tax plan

hoffse · April 2017

jtmh2012 said:

hoffse said:

At the very least people should be able to choose whether to file jointly or separately without there being penalties for choosing one vs. the other.

I wouldn't be against the choice.

However, regardless, at least in our circumstance, it'd still be me doing both of ours. So maybe it helps someone, but I don't see how it would stop either spouse from saying "go ahead and do our taxes and let me know where to sign".

Sorry, not trying to be a jerk, but I just finished helping my parents do theirs across state lines. Joint federal + mock separate federals for each parent + resident Virginia + resident North Carolina + non-resident Virginia (my parents are in the process of retiring/moving). That's in addition to my brother's return and my wife and I's joint return.

No I hear you - I do ours and always offer to let H review before he signs, and he never does. But over and over again I see cases where it went bad.

jtmh2012 · April 2017

hoffse said:

jtmh2012 said:

hoffse said:

At the very least people should be able to choose whether to file jointly or separately without there being penalties for choosing one vs. the other.

I wouldn't be against the choice.

However, regardless, at least in our circumstance, it'd still be me doing both of ours. So maybe it helps someone, but I don't see how it would stop either spouse from saying "go ahead and do our taxes and let me know where to sign".

Sorry, not trying to be a jerk, but I just finished helping my parents do theirs across state lines. Joint federal + mock separate federals for each parent + resident Virginia + resident North Carolina + non-resident Virginia (my parents are in the process of retiring/moving). That's in addition to my brother's return and my wife and I's joint return.

No I hear you - I do ours and always offer to let H review before he signs, and he never does. But over and over again I see cases where it went bad.

Yeah, and I'm not trying to knock that. It sucks.

LillibetteV · April 2017

jtmh2012 said:

hoffse said:

@Labro, yes in my dreamworld it would not matter if you were married or not - rates would not change. Actually, it would be amazing if they changed the rule for joint filing and required everybody to file separately. I have a case right now where one spouse forged the other's signature on their joint return. "Innocent spouse" is an entire concept/area of the tax law that only exists because we have joint filing, and I encounter it way more than seems reasonable. Treatises have been written on it. It would be much better if every person was taxed on their own income individually. It was be harder to hide income, and it would mean that one spouse couldn't offer the other spouse up a tribute when the IRS isn't paid.

My issue with doing that with the current tax code is that from my understanding is that if one spouse itemizes, then both must. So who gets the mortgage interest deduction or the property tax deduction. Granted, not as much of an issue if those deductions go away under the new plan. But I could see that causing problems with how it works now.

This is correct, and why we paid less taxes as two individuals than as a married couple. I'm the only legal owner of our house and so before we were married I would take all of my itemized deductions and he was able to take the standard for a total higher deduction between the two of us. But as I said above I think the fact that I can join his health plan (which is far less expensive than mine would be at my employer) probably evens out the increased taxes for us in the end.

jtmh2012 · April 2017

LillibetteV said:

jtmh2012 said:

My issue with doing that with the current tax code is that from my understanding is that if one spouse itemizes, then both must. So who gets the mortgage interest deduction or the property tax deduction. Granted, not as much of an issue if those deductions go away under the new plan. But I could see that causing problems with how it works now.

This is correct, and why we paid less taxes as two individuals than as a married couple. I'm the only legal owner of our house and so before we were married I would take all of my itemized deductions and he was able to take the standard for a total higher deduction between the two of us. But as I said above I think the fact that I can join his health plan (which is far less expensive than mine would be at my employer) probably evens out the increased taxes for us in the end.

Yeah, in our case, I don't think we'd benefit. Being married we'd if we both took the standard deduction, then we lose out on the mortgage, property tax, donation deductions. If we filed separately, then I'm not sure I could balance the deductions enough to offset the lost off the standard deduction for at leastr one of us. I'd have to run the numbers and see how that worked out as I've never done it.

I'm all for being able to simplify this stuff.....

vlagrl35 · April 2017

yea for getting rid of death tax - the year I filed taxes the first husband passed I think I owed around 4k - that was crazy.

brij2006 · April 2017

vlagrl35 said:

yea for getting rid of death tax - the year I filed taxes the first husband passed I think I owed around 4k - that was crazy.

My understanding is that this will be only for the large estate taxes. So over $5.5mil. Any money in an estate that hasn't already been taxed, would still need to be. But currently there's an estate tax for estates over $5.5mil. So on top of that money already being taxed or being taxed when the estate cashes it out (like a 401k), it also does an overall tax for the estate on top of that because it's worth over $5.5mil.
I'm all for this being done away with. If my parents passed away tomorrow, I'd be battling estate tax. Even though not 1 single bit of their assets are in pre-tax accounts. So every single cent of their estate has already had taxes paid on it. Yet because they actually work their butts off and have set themselves up to leave their children something, their estate will be penalized. We have seriously had the conversation of what portion of land I'll sell off just to cover the estate taxes when they die. And they're by far rich people who make millions every year. They've just slowly built the farm to be worth something.

The taxes when someone passes is a serious mess. We normally receive about $3k back in taxes every year. Last year we claimed my 1/3rd of income from my brothers' estate, as well as the 1/3rd of expenses. Oh, but you can only claim a max of $3k in expenses each year on an estate. So we had to pay $7k in taxes last year, and over the course of 15 years I'll finally have the rest of the expenses deducted. So stupid. I paid the taxes up front and they'll gradually give them back.,

jtmh2012 · April 2017

brij2006 said:

vlagrl35 said:

yea for getting rid of death tax - the year I filed taxes the first husband passed I think I owed around 4k - that was crazy.

My understanding is that this will be only for the large estate taxes. So over $5.5mil. Any money in an estate that hasn't already been taxed, would still need to be. But currently there's an estate tax for estates over $5.5mil. So on top of that money already being taxed or being taxed when the estate cashes it out (like a 401k), it also does an overall tax for the estate on top of that because it's worth over $5.5mil.
I'm all for this being done away with. If my parents passed away tomorrow, I'd be battling estate tax. Even though not 1 single bit of their assets are in pre-tax accounts. So every single cent of their estate has already had taxes paid on it. Yet because they actually work their butts off and have set themselves up to leave their children something, their estate will be penalized. We have seriously had the conversation of what portion of land I'll sell off just to cover the estate taxes when they die. And they're by far rich people who make millions every year. They've just slowly built the farm to be worth something.

Please forgive my asking. Would it be possible to avoid any of this by starting to pass assets over now versus waiting for them to pass away or some sort of trust or something? I'm sure you've already looked into this, just curious what the answers were....

smerka · April 2017

There are lots of ways to avoid paying estate taxes and there are lawyers who do that for a living. Currently the amount is $5,450,000. It's my understanding that you only pay taxes on the amount exceeding that. https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax

Brij2006 - That $3,000 carry forward loss doesn't just deal with estates/final returns. I know a guy who sold a bunch of stock at a loss and would have been able to carry the loss forward for a long time $3,000 a year. But then he died. And the carry forward loss died with him.

smerka · April 2017

Very few people actually pay estate taxes. Around 5,200 of the 2.7 million who die each year. Or 5,200 of the 136,000,000 tax returns filed.

https://www.google.com/amp/s/www.washingtonpost.com/amphtml/news/politics/wp/2017/04/26/heres-how-many-people-have-to-pay-the-estate-tax-that-trump-wants-to-dump/

vlagrl35 · April 2017

death is just so expensive - you really have to plan for it

brij2006 · April 2017

jtmh2012 said:

brij2006 said:

vlagrl35 said:

yea for getting rid of death tax - the year I filed taxes the first husband passed I think I owed around 4k - that was crazy.

My understanding is that this will be only for the large estate taxes. So over $5.5mil. Any money in an estate that hasn't already been taxed, would still need to be. But currently there's an estate tax for estates over $5.5mil. So on top of that money already being taxed or being taxed when the estate cashes it out (like a 401k), it also does an overall tax for the estate on top of that because it's worth over $5.5mil.
I'm all for this being done away with. If my parents passed away tomorrow, I'd be battling estate tax. Even though not 1 single bit of their assets are in pre-tax accounts. So every single cent of their estate has already had taxes paid on it. Yet because they actually work their butts off and have set themselves up to leave their children something, their estate will be penalized. We have seriously had the conversation of what portion of land I'll sell off just to cover the estate taxes when they die. And they're by far rich people who make millions every year. They've just slowly built the farm to be worth something.

Please forgive my asking. Would it be possible to avoid any of this by starting to pass assets over now versus waiting for them to pass away or some sort of trust or something? I'm sure you've already looked into this, just curious what the answers were....

We're actually doing that with some stuff now. Which is why my brothers' farm land got put into my name and my parents signed off on their 1/3rd of it. So technically I own it as an asset, but they farm it and get the income from it. It's just a way for us to try and keep it out of the estate since I'm not the only heir.
Their lawyer also has it set up that upon death of 1 parent, half of the assets goes into a trust for that parent. So it splits their assets in half and is treated as 2 entities. It's a nice loophole, but only works if they don't pass away at the same time. That's best case scenario.

Trumps tax plan

Re: Trumps tax plan

Choose Another Board

Search Boards