You might be the lucky winner or you might just realize the MSM has been less than honest since the majority of people benefited. I ended up about the same, perhaps slightly worse off. But my kids and step kids who do not own homes benefited greatly. I do their taxes, and those who do not itemize but were kinda on the cusp of would be buyers were the big winners, but nobody will tell you that, most polls and articles say the opposite. I still encourage those in low price and low tax states to buy, but those still in So Cal I think this may be the X factor, however I have seen no evidence yet that it impacting prices. The reality is the people that can afford So Cal homes pay enough in state taxes to use up the salt limit that property taxes are no longer deductible, self included. But no sign of that yet in prices, not sure if we will see it. The market can remain irrational longer than you can stay solvent, as the saying goes.

My tax bill was considerably lower (~5000 lower) too. I’m ready to become a Trump supporter. Do I just need to get a MAGA hat or do I need to rip children from their mothers’ arms and put them in cages? Perhaps just grabbing a woman inappropriately or threatening a Canadian would suffice? Whatever it takes.

I would never try to do this but I think theoretically it is possible but tricky since you have to charge at least fair market rent. Suppose you get a mortgage such that the interest plus depreciation of the home is equal to the rent. Then there is no income to pay taxes on but you can deduct the interest and property taxes.

I suppose you would have to sell within 2 years or stop renting for three years before selling to get the cap gains exclusion.

As an extra benefit, all repairs would be deductible as well as well as new appliances. Could write off the gardener as well. I wonder if you could rent it furnished so you can write of cable, telephone, sdg+e, and water!

[quote=flu]
My taxable income between 2018 versus 2017 is about the same, but the total federal taxes I’m paying this year is about $17k less than last year, and my effective tax rate dropped by 5%.[/quote]

You hinted your AGI around $340K. That is a real sweet spot with the new tax law. Assuming 24K standrad deduction, txable income is 316K. It used be 33% tax bracket for income above 233K in 2017, now income above 157.5K and below 315K are only taxed at 24%. That is 9% drop in tax rate. For AMT tax payers the marginal rate was 32.5% or 35% corresponding 26% or 28% AMT rate. Every extra dollar of income also reduces AMT exemption by 25 cents, so that is how 32.5% come from: 1.25 x 26% = 32.5%

Child credit $2k for every child under age of 17. 3 kids can get 6K credit. Old law phased out child credit starting at 110K, now full credit if AGI < $400K My AGI in 2018 is 8K less than 2017 due to the family leave time taken, but total tax is $9k less. Adjusted for income difference to assume AGI are the same for the 2 years, my tax would be 7K less. Main difference maker for me: Lower marginal rate of 24% from previous 32.5% AMT rate. No more AMT.

I calculated my 2018 taxes using the 2017 rules and the 2018 rules. Using the current rules, 2018, I saved just over $3,000.00. That $3,000.00 will be injected into the private sector via rounds of golf.