Your Survival Guy

Preparing your investments and family for when disaster strikes.

Disclosure

  • Home
  • Your Survival
    • Special Report: FOOD SHORTAGE: Crazed Hoarding Is Not Preparing
    • Your Survival Guy’s Super States
    • Constitutional Carry
    • EMP Threat
    • Tucker Explains
    • Newport Gas Outage
    • Water
      • Emergency Water Storage
      • Let There Be Water
    • Get Your Gun and Your Training Now
    • Satellite Phones
    • Navy SEAL Survival Kit
  • Your Money
    • Coronavirus Infects Stock Market
    • Looking for a Better America
    • You Invest, They Win
    • Where to Keep Your Cash
    • Paris
    • How to Buy a Boat
    • Dead or Alive? The Future of Long-Term Investing
    • Is Vanguard too Big?
    • Cryptocosm and Life After Google
    • The Last Intelligence Report
    • The Truth Behind the S&P 500
    • RAGE Gauge
    • How Many “Retirees” Will Keep Working?
    • Your Retirement Life
    • You’ll Love This if You’re Dreaming of an Active Retirement Life
  • Weapons
    • Self Defense
    • Every Family Should Own at Least One Shotgun: Here Are Three
  • About Me
    • Your Survival Guy: “Life on Main Street Hasn’t Been This Hard in a While”
    • Preparing for Times Like These
    • My Videos/Pics
    • Music
      • RIP Neil Peart: You Will Always Be Remembered as a “Modern-Day Warrior”
    • Your Survival Guy: Make Your Bed and The Hero Code
  • You
    • Our Cabin on Kodiak, Alaska
    • If You Are in Pain, this May Help. It Helped Me.
    • How to Save for a Grandchild
    • FIRE! Financial Independence, Retire Early
    • Compound Interest
    • Arithmetic of Portfolio Losses
    • Maximum Portfolio Withdrawal Rate
    • An Efficient Frontier
    • Retirement Compounders
    • Counterbalanced Total Returns
  • Survive & Thrive
    • January 2023: Stacking Wood and Compounding Money
    • December 2022: Your Survival Guy Prefers Bombardier’s Global Express 7500
    • November 2022: Arriving in Style at Le Bristol Hotel, Paris
    • October 2022: Sink Your Teeth into These Bond Yields
    • September 2022: Do You Have the 7 Habits of Highly Effective People?
    • August 2022: “Watch This Boat off Our Stern,” My Dad Said “He’s Coming in HOT”
    • July 2022: MONEY TALKS: Your Survival Guy’s Best Service in Paris
    • June 2022: “I’ve Been with Richard Young for Over 30 Years Now”
    • May 2022: Survive “If You Fail to Plan, You Plan to Fail”
    • April 2022: Dream On! Fishing the Double Down in Key West
    • March 2022: Your Survival Guy Hears the Craziest Investing Stories
    • February 2022: Your Survival Guy’s 2022 Super States
    • January 2022: The Least Affordable Housing Market in the U.S.
    • December 2021: Listen Your Survival Guy is not “Mr. Peanut”
    • November 2021: Joe Biden is Weaponizing Your 401(k) Against You
    • October 2021: Time to Get Your Lazy Cash Off the Couch
    • September 2021: What’s Your Survival Guy Investing in Right Now?
    • August 2021: To Where Will You Flee?
    • July 2021: This Bubble’s Popped Baby
    • June 2021: Your Survival Guy’s Summer Job, Inflation & You
    • May 2021: You’re Telling Me Friends Ask You This Question
    • April 2021: Is There One Best Place in America for ‘Liberty Retirees?’
    • March 2021: America’s Growth Corridors
    • February 2021: Troops in D.C. & Your Authoritarian Virtual Panopticon
    • January 2021: Are You Ready for The Great Reset?
    • December 2020: Disaster Prep in Our Newport Bunker and Your Survival
    • November 2020: Election 2020 Edition: Stock Market is Predicting a Trump Win
    • October 2020: You Invest They Win, AGAIN
    • September 2020: Proud to be an American: Pro-Trump Parade Turns Rhode Island Red
    • August 2020: The Clock is Ticking: You Must Protect Your Family
    • July 2020: What Will Her Life Be Like Now?
    • June 2020: Your Survival Guy’s Home (and Money) Protection Plan
    • May 2020: Future Look at Covid-20, or the Next Deadly Virus
    • April 2020: Only Trump Saw the Risk in America’s Relationship with China
    • March 2020: Coronavirus Infects Stock Market
    • February 2020: Escape the City: Live Small, Cheap, and Safe in America
    • January 2020: Is Your Cash Safe? Probably not This Safe
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • Welcome

These 14 Simple Tax Changes are Needed Now

March 7, 2017 By E.J. Smith - Your Survival Guy

America desperately needs a tax overhaul to fix a system that has become unwieldy and difficult for business. Reforms could boost the economy, and even the thought of tax reforms has sent markets soaring. Here, from Fidelity, are fourteen tax changes that could show up in any potential reform package.

Tax rates: The Trump plan and the House plan would both cut the top rate to 33 percent from 39.6 percent, raise the lowest rate to 12 percent from 10 percent, and collapse the number of brackets — different tax rates at different income levels — to three from seven. The Senate leadership has not yet weighed in on rates.

Itemized deductions: The Trump plan would cap itemized deductions at $200,000 a year for married couples filing jointly and $100,000 for single filers. To take an itemized deduction, you subtract the specific item from your income, which reduces your taxes. But under the Trump plan, the standard deduction would increase, so many people who file itemized returns now may not find it in their interest to do so in the future.

Mortgage interest and real estate tax deductions: The itemized-deductions cap proposed by Mr. Trump would effectively limit interest and real estate tax deductions for the owners of expensive homes — a backdoor way of curtailing them. There has been talk in Congress for years about limiting or eliminating itemized deductions for mortgage interest (interest payments on up to $1 million in mortgage debt are now deductible), usually in conjunction with raising the standard deduction, although these changes are not part of the current House plan. The real estate industry has lobbied strenuously to retain the interest and real estate tax deductions, which are important for many homeowners.

Filing status: The president’s plan would eliminate the head-of-household filing category, which gives more favorable rates to some unmarried people who can claim dependents than to single taxpayers.

Standard deduction: Mr. Trump would increase the standard deduction to $15,000 from $6,350 for single filers and to $30,000 from $12,700 for married couples.

Personal exemptions: Mr. Trump has also proposed doing away with exemptions for taxpayers and their dependents, which are worth $4,050 each. (An exemption is like a deduction; you can subtract the amount of the exemption from your income and cut your tax bill.) Those exemptions now begin to phase out at an adjusted gross income of $259,400 for single taxpayers and $311,300 for married couples, and disappear completely for incomes above $381,900 for single filers and $433,800 for couples.

Carried interest: Mr. Trump has said that carried interest, which is income earned by general partners in private equity and hedge funds, should be taxed as ordinary income. Under current law, it is taxed at the lower capital gains rate.

Dependent-care deductions: Under the Trump plan, even if taxpayers don’t itemize, they would be given more liberal credits for care of children and older adult dependents. The credits would not be available to individuals with adjusted gross incomes of more than $250,000 or to couples with more than $500,000 in income. Tax credits are more valuable to taxpayers than deductions, because credits are subtracted from the tax that is owed, not from the income on which that tax is based.

Alternative minimum tax: Under the Trump plan, this tax, known as the A.M.T., which limits some deductions for many high earners and effectively raises the amount of tax they owe, would be repealed.

Capital gains tax rates: The Trump plan does not call for lowering the rates on long-term capital gains, which now top out at 20 percent for the highest earners — single filers with adjusted gross incomes above $415,050, and couples with incomes above $466,950. The House plan would lower capital gains rates.

Capital gains Medicare surtax: Mr. Trump proposes ending the 3.8 percent surtax on investment income from capital gains, which affects single taxpayers with adjusted gross incomes over $200,000 and couples with incomes over $250,000. (If the income over those thresholds is less than the capital gain, the lower amount is subject to the 3.8 percent tax.) That surcharge was instituted as part of the Affordable Care Act. If the health law is repealed, the surcharge will probably be eliminated.

In addition, repeal or revision of the Affordable Care Act may affect these areas:

Medical deduction: Taxpayers who itemize can currently deduct medical expenses that amount to more than 10 percent of their adjusted gross income. That amount rose from 7.5 percent (where it remains for people over 65) as part of the Affordable Care Act. If the act is repealed, will the rate go back down? That’s uncertain.

Fines for not having medical insurance: This penalty, part of the Affordable Care Act, is not really an income tax, but it is reported on tax returns and many people think of it as one. It is based on a complex sliding scale, and can be $695 a year for an individual and $2,085 for a family, or in some cases significantly more. That penalty could be eliminated.

Medicare payroll tax: This isn’t really an income tax, either, although the amount paid appears on the standard W-2 income statements that employers fill out. The Affordable Care Act raised the payroll tax by 0.9 percent on single taxpayers with gross wages of over $200,000 and couples with incomes over $250,000. That will presumably be eliminated if the act is dismantled.

Read more here.
The following two tabs change content below.
  • Bio
  • Latest Posts
My Twitter profileMy Facebook profileMy Instagram profile

E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
My Twitter profileMy Facebook profileMy Instagram profile

Latest posts by E.J. Smith - Your Survival Guy (see all)

  • Warren Miller: If You Don’t Do It This Year, You’ll Be… - January 30, 2023
  • Your Investment Focus Is the Foundation for Success - January 30, 2023
  • CATO: Global Freedom Is in Sharp Decline - January 27, 2023
  • TIME FOR A GONDOLA? Little Cottonwood Canyon Jammed with Traffic - January 27, 2023
  • Biden Administration Destroying Retiree Fiduciary Protections - January 27, 2023

If you enjoyed this post, email it to a friend:

  • Email
  • Print
  • Facebook
  • LinkedIn
  • Twitter
  • WhatsApp

Related Posts

Money 101

Trending

  • 4 Life Changing Words for Your Survival Guy: “You Should Try This”
  • Invest with Peace of Mind and Comfort
  • LOSING POWER: Your Survival Guy's Nightmare Scenario
  • Welcome to Hotel California, Where You Can Never Leave
  • The Importance of a Balanced Portfolio
  • Your Survival Guy's 2022 Super States
  • Stocks Go Up and Down: Get Paid Along the Way
  • The World Economic Forum's Record of Destruction
  • America's Super States and Stocks that Respect YOU
  • Don't Let Your Lazy Cash Eat all Your Food

Must Reads

  • Bad Guy with a Gun STOPPED by Good Woman with a Gun
  • BIDEN-FLATION: Here’s Why Prices Are Up At Your Favorite Restaurant
  • Americans Fleeing High Tax States for Growth Corridors
  • Your Survival Guy’s Champagne Taste on a Beer Budget
  • Why You Can’t Afford to Miss the Boat
  • BLOCKBUSTER SPEECH: Congressman Defends the Second Amendment
  • This State Leads America in Gun Ownership
  • CRIME WAVE: A Top Cop Shouldn’t Have to Ask His City for This
  • Slow and Steady Wins the Race: Most People Can’t Handle Making Money This Way
  • “Talk to Me, Goose!” Time Flies in Top Gun: Maverick
Only if You’re Serious
Crazed Hoarding Is not Preparing
How to Save Rainwater Effectively
Your Survival Guy in Paris
Your Survival Guy's Fishing Stories
Financial Independence, Retire Early
Money 101
Pandemic Creates Virtual Panopticon
Emergency Water Storage
Find Freedom in America
Second Amendment
How Can You Save Money for Your Grandchild
Great Reset
See Who's Missing the Boat
Richard  Young Reports
How You Can Save Money for Your Grandchild
Why Fidelity is Number One
The Best States for Survival
You Invest, They Win
Escape the City
Why Vanguard is Too Big for YOU
Island Life

Copyright © 2023 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.