Who was paying the Alternative Minimum Tax (AMT)? A spreadsheet

As we head into the heart of tax season, people (well, those who haven’t read Will Republican Tax Bill make you pay less taxes?) are taking stock of what the major changes are this year. One of the major differences is that the Tax Cuts and Jobs Act lowered the number of people subject to the AMT from 5.2 million to just 200,000.

But who were these 5.2 million people? Or how much income were they making that they would be subject to this tax?

The goal of our spreadsheet is to calculate taxes owed under the normal tax system, as compared to under the AMT system. Our spreadsheet calculates taxes owed under both systems for a variety of incomes and determines what income levels people owe more under the AMT system. Continue reading “Who was paying the Alternative Minimum Tax (AMT)? A spreadsheet”

Will the Tax Cuts and Jobs Act make you pay more or less in taxes?

House and Senate Republicans have passed a major tax bill. It makes big changes to how the government taxes its citizens. Most notably, corporations and some individuals will pay less tax (corporate rate lowered to 21%, lower individual brackets, higher standard deduction), but many deductions like the state and local deduction and personal exemption will be limited to pay for it and the deficit will likely go up.

How would this affect you? Is the backlash against certain Republican lawmakers in high tax states like California fair? Do I sense a spreadsheet in the making? After 3 prior tax posts including How to Estimate Taxes, a Marriage Tax Penalty Calculator, and an analysis of the Trump Tax Plan, you would think we had suffered enough…but here we go!

Sneak Peak – Our results indicate that married Californian homeowners making under about $700k are better off under the new plan, while those making over $700k are worse off. Disclaimer – this is really complicated, we might have made some errors (please let us know if you see any), and your mileage may definitely vary:

Continue reading “Will the Tax Cuts and Jobs Act make you pay more or less in taxes?”

Will you pay more or less under the Trump Tax Plan?

After nearly a year and a half after the candidates first declared their intention to run for the Presidency, we have now elected a new President. Trump’s Presidency was a surprise to many, and with Republicans in control of both the House and Senate along with the Presidency, major changes could be possible.

One of those changes could be taxes, where Trump has proposed a tax system with three tax brackets of 12%, 25% and 33% and an increase in the standard deduction to $30k for joint filers, while also eliminating exemptions for dependents. We wondered: roughly how would taxes change for any given level of income, filling status, and number of family members? This is a problem spreadsheets are well suited to solve! Continue reading “Will you pay more or less under the Trump Tax Plan?”