Tax Season this year

[1life]

What should we expect the new tax laws to do to us this year ? I’m in a total opposite field but was hoping we could get some feedback from our financial analysts and accountants. Thanks

[TexTushHog]

Depends on whether you 1) itemize your State and Local Tax (SALT) deduction; and 2) whether you adjusted you payroll deductions and quarterly estimates correctly.

I’m paying about $5,600 more this year because all but $10,000 of my property tax payments are not deducted. But unless that issue hits you, it’s going to be very much like your previous year return (unless you have qualifying pass through income).

[billw1032]

Because of the increased standard deduction, I don't have enough deductible expenses to itemize. So, I paid my home property tax after Jan 1 and will pay this year's tax in December. Also, I moved all charitable donations from last year to this year. That way, my donations will be deductible this year.

I didn't pay attention to the $10k cap though, so it may not help unless I make substantial charitable contributions this year. I'm surprised we aren't hearing more stories of charities having reduced donations because of this.

[Chung Tran]

the two guys who posted before me are filthy rich Bastards, their answers do not represent the bottom 99% of us

I kid.. about the Bastards part

many refunds are lower, because the withholding tables adjusted lower by a larger margin than tax rates. the tax limit TTH posted about is the $10,000 cap on ALL deductible tax payments, including State and sales taxes. if you are fortunate to be capped in that area, you do not get my sympathy, because you are ipso facto wealthy from my POV.

I'm sure donations have dropped significantly, but I bet there's a bit of lag.. next year will show the big drop, after people realized this year, that the deduction went away for them.

the new $2,000 child tax credit is a head fake, when you consider exemptions disappeared. a lot of the new law is adding a pinch here, taking a dash there.. like a food recipe, made up on the fly.. which is really what the new tax bill represents. and I'm convinced the shuffling was put in place, to distract us from the fact that the extremely wealthy made out like Bandits.

[Chung Tran]

one nice loophole for Texans (and Louisianans).. you can thank me later if this applies to you.

because of Hurricane Harvey, if you received an early distribution from a tax-deferred retirement account, in 2018, you can claim exempt from the 10% penalty. if you received any kind of retirement distribution, you can elect to claim 1/3 of the amount this year, and the next 2 tax years. the latter (a death benefit) applied to me, and claiming only 1/3 impacted my return significantly.


the caveat? you must have been "impacted" by Hurricane Harvey, and been living in Texas or Louisiana when Harvey hit in August, 2017. "impacted" is undefined in the code.

[billw1032]

CT, definitely not a rich as you think. I bought this house 20 years ago and the appraised value has escalated maybe 60% to 70% or so and taxes along with it. Add to that the fact that taxes are high in Plano. So annual property + school tax bill is about $6k. That's a significant chunk of my annual budget. It's even more obvious when it isn't amortized monthly by the mortgage company (since I paid off the house a couple of years ago).

[Chung Tran]

Originally Posted by billw1032

CT, definitely not a rich as you think. I bought this house 20 years ago and the appraised value has escalated maybe 60% to 70% or so and taxes along with it. Add to that the fact that taxes are high in Plano. So annual property + school tax bill is about $6k. That's a significant chunk of my annual budget. It's even more obvious when it isn't amortized monthly by the mortgage company (since I paid off the house a couple of years ago).

see what happens when (cough) we make assumptions? we (cough) start calling other guys Bastards on Hooker Boards when we haven't got a clue

good point.. we definitely need to curb property tax hikes in Texas. especially now that deducting payments has become so difficult.

[Guest050619-1]

Originally Posted by Chung Tran

good point.. we definitely need to curb property tax hikes in Texas. especially now that deducting payments has become so difficult.

I'm ready. Collin County is frickin' killing me. In 36 months mine's jumped through the roof. Speaking of which....homeowner's insurance has gotten ridiculous over that same span o' time, too. A roof over 7 years of age (in spite of ZERO hail in our neighborhood over that time) gets you penalized.....

[TheWanderer]

So a roof over 7 years old gets you penalized in terms of your insurance premium? I'm just curious as mine is now 9+ years old and I have been fortunate to not have been hit by hail yet.

Back to taxes, I'm sure I'll be hosed, almost afraid to look. I can already see that I had a smaller % pulled out for Federal.
I may get a higher deduction taking the standard $12K but doubt it will make much difference.

[BLM69]

Roofs usually have a 30 year life span

[rexdutchman]

Yeah I think this year will be bad , the early year tax breaks will come back on us all.

[TexTushHog]

Originally Posted by Chung Tran

see what happens when (cough) we make assumptions? we (cough) start calling other guys Bastards on Hooker Boards when we haven't got a clue

good point.. we definitely need to curb property tax hikes in Texas. especially now that deducting payments has become so difficult.

Yeah, you don’t have to be particularly rich to get over the property tax threshold. And if you have rural acreage, it just gets that much worse. Same with oil and gas royalty interests, even if they’re not producing big income. Texas has some if the highest property taxes in the country, even though it’s government is generally underfunded. An income tax would be much more equitable.

[Guest050619-1]

Originally Posted by BLM69

Roofs usually have a 30 year life span

Lol....right.

Yeah, that's what the manufacturers (like to) advertise. Actually, they used to advertise high-grade (composite) shingles as having a Lifetime (limited) Warranty (but insurance companies have taken them to task on those claims....right after having to make good on tens-to-hundreds of thousands of claims following moderate-to-severe hail strikes).

Today, depending on the grade of shingle that's on your home, they'll claim their product can last 30, 40, up to 50 years (however, the "unsaid" part of that....only so long as your home...and roof...are snuggled comfortably in a vacuum).

As of 2017, (still awaiting final tally on last year) in Texas, roofs get replaced on an average every 8.7 years. (I know...that doesn't compute but that's the numbers, folks). Oh, sure...you'll come across homes with roofs 17, 18, even into the low 20's years of age....but by that time there's usually a lot more damage to the product than what the homeowner might have suspected (and an inspection....and perhaps a claim....should have been made years prior to that).

[TheWanderer]

If you have to have your roof replaced do they reduce your claim under the guise of depreciation?
That's one thing I have not had to deal with...yet.

[TexTushHog]

Originally Posted by TheWanderer

If you have to have your roof replaced do they reduce your claim under the guise of depreciation?
That's one thing I have not had to deal with...yet.

Yes. If your roof is 20 years old and sustains hail damage, it makes sense that they shouldn’t have to pay 100% of a new roof. Yours was going to be replaced relatively soon in any event. On the other hand, if the roofers left last week, and the mother of all hail storms cones this week, they are — and should be — on the hook fir it all. But you need yo have documentation of the age of your roof and the quality of the shingles. And it helps to have had someone evaluate the shape the roof is in from time to tie. The guy who installs my Xmas lights every year sends me a note on what the roof looks like. It’s always, “looks half it’s age —in great shape.”