Wow. Your property taxes seem pretty high. Similarly, here in California,
property taxes are not a state tax at all, but a local tax to (primarily)
pay for schools.
When we had our S corp, our CPA advised us to pay a salary, but only enough
to keep the IRS satisfied that we were paying salaries. So we each took a
token salary, and any excess revenue was taken as a "distribution to
shareholders". We paid minimal payroll taxes as a result.
--
bp
part15sbs{at}gmail{dot}com
On Mon, Apr 1, 2019 at 3:12 PM Ken Hohhof <af...@kwisp.com> wrote:
> FWIW, property tax is typically a local tax, not a state tax. Illinois
> does not have a state property tax, and around 2/3 of property taxes go to
> fund school districts.
>
>
>
> I still live in the house we bought in 1976. We added two bedrooms and a
> family room after we had kids. It is not a mansion, but we live in DuPage
> County, in a town on one of the commuter rail lines. My property tax bill
> is around $19,000. More than some neighbors, less than others. Add the
> state taxes, and the $10,000 cap on SALT means I will be paying federal tax
> on at least $10K that I didn’t pay tax on last year and that I never
> received as disposable income. My wife died 2 years ago so my standard
> deduction is $12K not $24K. Yes that is higher than last year, but that’s
> cancelled out by the personal exemption going away. I have one kid who
> lives with me, but that doesn’t help me with taxes.
>
>
>
> Lots of people, especially seniors, are probably in the same situation as
> me. If you don’t have a large income so you can pay the substantially
> higher taxes, the federal government is essentially telling you that you
> have to move out of your house. And I think for a lot of people the
> withholding tax formulas didn’t properly account for this change.
>
>
>
> I think you are oversimplifying this as we’re finally sticking it to the
> state governments who spend and tax too much. In the case of property tax,
> it’s not even a state tax. And it’s not like property taxes were invented
> yesterday or during the administration of <fill in whatever President you
> didn’t like>. Like I say, I’ve lived here for over 40 years, paid property
> taxes the whole time, but I didn’t then also pay income tax on that money
> that I never got to spend. It’s not taking any money away from the state
> of Illinois, and it has no effect on the state’s spending or taxing
> decisions. It just takes several thousand dollars out of my wallet.
>
>
>
> The other thing I’m going to have to discuss with my accountant is the S
> Corp pass through change. It could be really stupid now for my company to
> be paying me a salary, maybe a distribution would be the way to go. I’m
> not sure. I always tried to do the right thing and pay myself a reasonable
> salary so the government could get their various payroll taxes, but maybe
> I’m being a moron.
>
>
>
>
>
>
>
> *From:* AF <af-boun...@af.afmug.com> *On Behalf Of *Steve Jones
> *Sent:* Monday, April 1, 2019 4:16 PM
> *To:* AnimalFarm Microwave Users Group <af@af.afmug.com>
> *Subject:* Re: [AFMUG] OT: Tax cut my ass...
>
>
>
> the state has their right to do as they please, but they dont have the
> right to do it on the feds back. why arent the states offering credits on
> federal taxes?
>
>
>
>
>
> On Mon, Apr 1, 2019 at 2:29 PM Carl Peterson <cpeter...@portnetworks.com>
> wrote:
>
> Whatever happened to states rights? The states have a right to decide
> what level of service/taxation they like. What it BS is the federal
> government taxing you on money that you never made because it was taxed at
> the state level.
>
>
>
> On Mon, Apr 1, 2019 at 11:06 AM Steve Jones <thatoneguyst...@gmail.com>
> wrote:
>
> Im glad they dropped the SALT to 10 percent. I wish they would phase it
> out to zero. Force the states to get their houses in order, force people to
> make more sound decisions in both purchases and in whom they check off at
> the ballots. No more raising taxes and saying, its all good, you can write
> it off on your federal.
>
>
>
> On Mon, Apr 1, 2019 at 1:53 AM Forrest Christian (List Account) <
> li...@packetflux.com> wrote:
>
> One gotcha I found with my taxes (when doing the estimates for the
> extension) is that many preparers and tax software don't handle the
> pass-through entity deduction correctly.
>
> If you have a s-corp or a partnership or a LLC or similar which passes
> through it's income to you, then in many cases up to 20% of this can
> be written off regardless of what else is going on on your return.
> I.E. it's a separate deduction from either your standard or itemized
> deduction.
>
> I though I was getting hit really hard until I figured out that this
> hadn't been applied correctly.
>
> On Sun, Mar 31, 2019 at 8:32 PM Ken Hohhof <af...@kwisp.com> wrote:
> >
> > All state and local taxes (SALT) limited to $10K deduction so income
> tax, sales tax, and property tax. Trust me, it's not hard to exceed $10K
> in property taxes alone. Also property tax is typically local, not state,
> and in many areas is the primary means of funding public schools.
> >
> > Real estate tax on farmland used for crops and livestock is still 100%
> deductible.
> >
> >
> > -----Original Message-----
> > From: AF <af-boun...@af.afmug.com> On Behalf Of Bill Prince
> > Sent: Sunday, March 31, 2019 8:41 PM
> > To: af@af.afmug.com
> > Subject: Re: [AFMUG] OT: Tax cut my ass...
> >
> > Yeah, our taxes don't reach that threshold. Mainly because we bought our
> house over 2 decades ago, and Prop. 13 keeps the valuation from rising too
> fast.
> >
> >
> > bp
> > <part15sbs{at}gmail{dot}com>
> >
> > On 3/31/2019 6:22 PM, Seth Mattinen wrote:
> > > On 3/31/19 5:03 PM, justsumname wrote:
> > >> The IRS website shows what changed. Tax rates did in fact go
> > >> down... but deductions were eliminated and/or capped lower and so
> > >> that's where the sticker shock is coming from. Itemized deductions
> > >> were capped at 10k for example, if I remember correctly.
> > >>
> > >> Two observations ... a very broad brush summary:
> > >>
> > >> --no longer are people with big mortgages being tax-subsidized by
> > >> people with smaller mortgages --no longer are States with low(er)
> > >> property taxes tax-subsidizing States with high(er) property taxes
> > >>
> > >
> > >
> > > State and local income tax is capped at $10k deduction.
> > > https://www.irs.gov/newsroom/tax-reform-brought-significant-changes-to
> > > -itemized-deductions
> > >
> > >
> > > Mortgages are capped at $750k for new mortgages after Dec 31, 2017.
> > > https://www.irs.gov/publications/p936
> > >
> >
> > --
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> >
> >
> >
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>
>
> --
> - Forrest
>
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> Carl Peterson
>
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