There have been some BIG changes lately with taxes and they are likely to impact you in a big way!
You may have heard of the tax reform package, called appropriately, The Tax Cut & Reform Bill.
However, it may not be a win for everyone. Listen to this podcast and discover why.
In this podcast you will:
- Learn how to qualify for the 2018 child tax credit under the new tax reform bill.
- Discover the difference in taxes for high earners, 600K or above with a mortgage and children.
- In 2018 high earners have a max out amount of their total deductions.
- What will happen if you have no state income tax? What states would you benefit more by paying no state income tax?
Resources mentioned in this podcast:
How the New Tax Package Effects You-Part 1- Tax Overview
How the New Tax Package Effects You-Part 2-Married Physicians with 400k Income
How the New Tax Package Effects You-Part 3-Married Physicians with 200k Income
Tax Brackets in 2017 vs 2018
Married Couple, 2 Kids, No Mortgage, No State Income Tax |
||||||
| Total Income in 2017 | $ 200,000 | Total Income in 2018 | $ 200,000 | |||
| Retirement Plan Contributions | $ (18,000) | Retirement Plan Contributions | $ (18,000) | |||
| Adjusted Gross Income | $ 182,000 | Adjusted Gross Income | $ 182,000 | |||
| Personal Exemptions | $ (16,200) | Personal Exemptions | $ – | |||
| Charitable Giving | $ (10,000) | Standard Deduction | $ (24,000) | |||
| Property Taxes | $ (5,000) | |||||
| State Income Taxes | $ – | |||||
| Mortgage Interest | $ – | |||||
| Taxable Income | $ 150,800 | Taxable Income | $ 158,000 | |||
| Tax | $ 29,177 | Tax | $ 26,639 | |||
| Child Credit | $ – | Child Credit | $ 4,000 | |||
| Net Tax After Child Credit | $ 29,177 | Net Tax After Child Credit | $ 22,639 | |||
Total Savings (Loss) |
$ 6,538 |
|||||
2018 Tax Bracket, Married Filing Jointly |
|||
| % | Start | End | base amt tax |
| 10% | $ – | $ 19,050.00 | $ 1,905.00 |
| 12% | $ 19,051.00 | $ 77,400.00 | $ 8,906.88 |
| 22% | $ 77,401.00 | $ 165,000.00 | $ 28,178.66 |
| 24% | $ 165,001.00 | $ 315,000.00 | $ 64,178.42 |
| 32% | $ 315,001.00 | $ 400,000.00 | $ 91,378.10 |
| 35% | $ 400,001.00 | $ 600,000.00 | $ 161,377.75 |
| 37% | $ 600,001.00 | Infinity | |
2017 Tax Bracket, Married Filing Jointly |
|||
| % | Start | End | base amt tax |
| 10% | $ – | $ 18,650.00 | $ 1,865.00 |
| 15% | $ 18,651.00 | $ 75,900.00 | $ 10,452.35 |
| 25% | $ 75,901.00 | $ 153,100.00 | $ 29,752.10 |
| 28% | $ 153,101.00 | $ 233,350.00 | $ 52,221.82 |
| 33% | $ 233,351.00 | $ 416,700.00 | $ 112,726.99 |
| 35% | $ 416,701.00 | $ 470,700.00 | $ 131,626.64 |
| 39.60% | $ 470,701.00 | Infinity | |
Married Couple, 2 Kids, $500k Mortgage, State Income Tax |
||||||
| Total Income in 2017 | $ 200,000 | Total Income in 2018 | $ 200,000 | |||
| Retirement Plan Contributions | $ (18,000) | Retirement Plan Contributions | $ (18,000) | |||
| Adjusted Gross Income | $ 182,000 | Adjusted Gross Income | $ 182,000 | |||
| Personal Exemptions | $ (16,200) | Personal Exemptions | $ – | |||
| Charitable Giving | $ (10,000) | Standard Deduction | ||||
| Property Taxes | $ (5,000) | Itemized Deductions | $ (40,000) | |||
| State Income Taxes | $ (12,440) | 6.84% | ||||
| Mortgage Interest | $ (20,000) | |||||
| Taxable Income | $ 118,360 | Taxable Income | $ 142,000 | |||
| Tax | $ 21,067 | Tax | $ 23,119 | |||
| Child Credit | $ – | Child Credit | $ 4,000 | |||
| Net Tax After Child Credit | $ 21,067 | Net Tax After Child Credit | $ 19,119 | |||
Total Savings (Loss) |
$ 1,948 |
|||||
2018 Tax Bracket, Married Filing Jointly |
|||
| % | Start | End | base amt tax |
| 10% | $ – | $ 19,050.00 | $ 1,905.00 |
| 12% | $ 19,051.00 | $ 77,400.00 | $ 8,906.88 |
| 22% | $ 77,401.00 | $ 165,000.00 | $ 28,178.66 |
| 24% | $ 165,001.00 | $ 315,000.00 | $ 64,178.42 |
| 32% | $ 315,001.00 | $ 400,000.00 | $ 91,378.10 |
| 35% | $ 400,001.00 | $ 600,000.00 | $ 161,377.75 |
| 37% | $ 600,001.00 | Infinity | |
2017 Tax Bracket, Married Filing Jointly |
|||
| % | Start | End | base amt tax |
| 10% | $ – | $ 18,650.00 | $ 1,865.00 |
| 15% | $ 18,651.00 | $ 75,900.00 | $ 10,452.35 |
| 25% | $ 75,901.00 | $ 153,100.00 | $ 29,752.10 |
| 28% | $ 153,101.00 | $ 233,350.00 | $ 52,221.82 |
| 33% | $ 233,351.00 | $ 416,700.00 | $ 112,726.99 |
| 35% | $ 416,701.00 | $ 470,700.00 | $ 131,626.64 |
| 39.60% | $ 470,701.00 | Infinity | |
MN State Income Tax Rates, Married Filing Jointly |
|||
| % | Start | End | base amt tax |
| 5.35% | $ – | $ 37,850.00 | $ 2,024.98 |
| 7.05% | $ 37,851.00 | $ 150,380.00 | $ 9,958.27 |
| 7.85% | $ 150,381.00 | $ 266,700.00 | $ 19,089.31 |
| 9.85% | $ 266,701.00 | Infinity | |
Married Couple, 2 Kids, $500k, Mortgage, State Income Tax |
||||||
| Total Income in 2017 | $ 600,000 | Total Income in 2018 | $ 600,000 | |||
| Retirement Plan Contributions | $ (18,000) | Retirement Plan Contributions | $ (18,000) | |||
| Adjusted Gross Income | $ 582,000 | Adjusted Gross Income | $ 582,000 | |||
| Personal Exemptions | $ – | Personal Exemptions | $ – | |||
| Charitable Giving | $ (10,000) | Standard Deduction | ||||
| Property Taxes | $ (5,000) | Itemized Deductions | $ (40,000) | |||
| State Income Taxes | $ (50,146) | 8.62% | ||||
| Mortgage Interest | $ (20,000) | |||||
| Taxable Income | $ 496,854 | Taxable Income | $ 542,000 | |||
| Tax | $ 141,983 | Tax | $ 141,078 | |||
| Child Credit | $ – | Child Credit | $ – | |||
| Net Tax After Child Credit | $ 141,983 | Net Tax After Child Credit | $ 141,078 | |||
Total Savings (Loss) |
|
$ 905 |
||||
2018 Tax Bracket, Married Filing Jointly |
|||||
| % | Start | End | base amt tax | ||
| 10% | $ – | $ 19,050.00 | $ 1,905.00 | ||
| 12% | $ 19,051.00 | $ 77,400.00 | $ 8,906.88 | ||
| 22% | $ 77,401.00 | $ 165,000.00 | $ 28,178.66 | ||
| 24% | $ 165,001.00 | $ 315,000.00 | $ 64,178.42 | ||
| 32% | $ 315,001.00 | $ 400,000.00 | $ 91,378.10 | ||
| 35% | $ 400,001.00 | $ 600,000.00 | $ 161,377.75 | ||
| 37% | $ 600,001.00 | Infinity | |||
2017 Tax Bracket, Married Filing Jointly |
|||||
| % | Start | End | base amt tax | ||
| 10% | $ – | $ 18,650.00 | $ 1,865.00 | ||
| 15% | $ 18,651.00 | $ 75,900.00 | $ 10,452.35 | ||
| 25% | $ 75,901.00 | $ 153,100.00 | $ 29,752.10 | ||
| 28% | $ 153,101.00 | $ 233,350.00 | $ 52,221.82 | ||
| 33% | $ 233,351.00 | $ 416,700.00 | $ 112,726.99 | ||
| 35% | $ 416,701.00 | $ 470,700.00 | $ 131,626.64 | ||
| 39.60% | $ 470,701.00 | Infinity | |||
MN State Income Tax Rates, Married Filing Jointly |
|||||
| % | Start | End | base amt tax | ||
| 5.35% | $ – | $ 37,850.00 | $ 2,024.98 | ||
| 7.05% | $ 37,851.00 | $ 150,380.00 | $ 9,958.27 | ||
| 7.85% | $ 150,381.00 | $ 266,700.00 | $ 19,089.31 | ||
| 9.85% | $ 266,701.00 | Infinity | |||
Married Couple, 2 Kids, $500k, Mortgage, State Income Tax |
||||||
| Total Income in 2017 | $ 600,000 | Total Income in 2018 | $ 600,000 | |||
| Retirement Plan Contributions | $ (18,000) | Retirement Plan Contributions | $ (18,000) | |||
| Adjusted Gross Income | $ 582,000 | Adjusted Gross Income | $ 582,000 | |||
| Personal Exemptions | $ – | Personal Exemptions | $ – | |||
| Charitable Giving | $ (10,000) | Standard Deduction | ||||
| Property Taxes | $ (5,000) | Itemized Deductions | $ (35,000) | |||
| State Income Taxes | $ – | |||||
| Mortgage Interest | $ (20,000) | |||||
| Taxable Income | $ 547,000 | Taxable Income | $ 547,000 | |||
| Tax | $ 161,841 | Tax | $ 142,828 | |||
| Child Credit | $ – | Child Credit | $ – | |||
| Net Tax After Child Credit | $ 161,841 | Net Tax After Child Credit | $ 142,828 | |||
Total Savings (Loss) |
|
$ 19,013 |
||||
2018 Tax Bracket, Married Filing Jointly |
|||||
| % | Start | End | base amt tax | ||
| 10% | $ – | $ 19,050.00 | $ 1,905.00 | ||
| 12% | $ 19,051.00 | $ 77,400.00 | $ 8,906.88 | ||
| 22% | $ 77,401.00 | $ 165,000.00 | $ 28,178.66 | ||
| 24% | $ 165,001.00 | $ 315,000.00 | $ 64,178.42 | ||
| 32% | $ 315,001.00 | $ 400,000.00 | $ 91,378.10 | ||
| 35% | $ 400,001.00 | $ 600,000.00 | $ 161,377.75 | ||
| 37% | $ 600,001.00 | Infinity | |||
2017 Tax Bracket, Married Filing Jointly |
|||||
| % | Start | End | base amt tax | ||
| 10% | $ – | $ 18,650.00 | $ 1,865.00 | ||
| 15% | $ 18,651.00 | $ 75,900.00 | $ 10,452.35 | ||
| 25% | $ 75,901.00 | $ 153,100.00 | $ 29,752.10 | ||
| 28% | $ 153,101.00 | $ 233,350.00 | $ 52,221.82 | ||
| 33% | $ 233,351.00 | $ 416,700.00 | $ 112,726.99 | ||
| 35% | $ 416,701.00 | $ 470,700.00 | $ 131,626.64 | ||
| 39.60% | $ 470,701.00 | Infinity | |||
MN State Income Tax Rates, Married Filing Jointly |
|||||
| % | Start | End | base amt tax | ||
| 5.35% | $ – | $ 37,850.00 | $ 2,024.98 | ||
| 7.05% | $ 37,851.00 | $ 150,380.00 | $ 9,958.27 | ||
| 7.85% | $ 150,381.00 | $ 266,700.00 | $ 19,089.31 | ||
| 9.85% | $ 266,701.00 | Infinity | |||
