I hear so many negative comments on tax bill. Yes the house bill is negative to Californians: low mortgage amount to deduct interest, limit prop tax to $10K, remove SALT deduction, and 35% tax rate kicks in so early starting from $260K family income. House bill hits hard on those $200-500K income range Californians. But the senate bill is much different and quite friendly to pigs on this board:
1) Mortgage amount to deduct back to $1m.
2) Added many lower tax rates to benefit family with income less than $200K. For high earners, $32% tax rate kick in much later at $320K (all assuming married couple) and it is low 24% before hitting that threshold.
3) $2000 child credit. Not reward family with multiple children, but still decent credit.
4) The new AMT tax is much more friendlier. Do not listen to journalists about the bad things on that, do you own calculations. In 2016 tax filing, the AMT exemption is $83,800 and exemption phase-out starts at $159,700. Senate bill AMT bill increases exemption to $109,400 and exemption phase-out starts at $208,400. For a family with $200-400K, currently most are hit by AMT here due to high SALT tax. My guess is the new plan probably would hit only about 20% of people in the income range, those get hit is by much smaller amount. For a family with $300K AMT income (federal AGI – mortgage interest – charitable contribution), the old AMT tax is $66.9K and new AMT tax is $56.3, a full $10K less.
5) Multiple children and high SALT, high mortgage and high property tax are normally higher earner, thus are already paying AMT and those deduction are not allowed currently any way.
