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SK in CV
ParticipantI’m with you.
No god, except the one that makes you capitalize the word, and not spell it out. Habit is GOD! Oops. G-D!
Participant[quote=scaredyclassic]with AMT, do you reaaly get much benefit from interest in the 3 to 500k income range?[/quote]
generally, AMT isn’t affected by mortgage interest. Mortgage interest is deductible in computing both regular tax and AMT.
Participant[quote=scaredyclassic]with AMT, do you reaaly get much benefit from interest in the 3 to 500k income range?[/quote]
generally, AMT isn’t affected by mortgage interest. Mortgage interest is deductible in computing both regular tax and AMT.
Participant[quote=FlyerInHi]I love Bill Mayer. Hope no allegations surface against him.[/quote]
Who is that? A cross between Bill Moyers and Bill Maher?
Participant[quote=Ribbles]I’m beginning to lean the same way. For my garage man cave, I have an 8 watt tube amp w/upgraded tubes hooked up to two Klipsch RP series floor standers and a powered 10″ (I refuse to call it a sub). For music it is sublime, works well for movies, too. I think adding more channels would ruin it.
It’s a bit jury rigged:
TV > optical to RCA converter > switch box > amp < switch box < bluetooth receiver < Spotify[/quote] You shouldn't have to think about if for long. Very little music is recorded (or at least produced) in more than 2 channels. It can't get any better than stereo (plus bass). Adding channels can't help, other than add more distortion.ParticipantNo 179 on rental property. Make it a trade or business. If you include significant services along with the rental, then it passes the test. Like a hotel. Not rental property. Not a hairbrained way to make money.
Participant[quote=harvey]
Still not following. It’s a standard practice to have a single member LLC and pay yourself on a W2, pay the rest as K-1 pass-through. There are payroll companies that specialize in that arrangement, as well as 401K providers, etc. I know many people that do it. I do it.Looks like the new plan is going to limit the 25% rate on pass-through to 30% of income, so it’s not as huge a win for the little guy. And the benefits for my example of executives becoming consultants is probably overstated.
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I know there are companies that do it. I’m telling you, paying a LLC member on a W-2 is both flat out wrong and not common. I have never seen it for a single member LLC, unless the LLC has elected to be taxed as an S-Corp, where it’s mandatory and the only way to pay shareholder employees. The default for single member LLCs is that they are disregarded entities for tax purposes, unless an affirmative check-the-box election is filed. The law is that LLC members cannot be paid as employees (As a practical matter, there are only minimal adverse consequences of doing it wrong, but potentially, it could be pretty expensive if the IRS so chooses). Beyond that, there is zero advantage to doing it other than paying tax through withholding rather than estimated taxes. 401K rules are the same, irrespective of whether LLC members are paid incorrectly as W-2 employees or receive non-W-2 salaries (technically “guaranteed payments”)
The 70/30 rule is there, but unless i’m reading it wrong, unless income from an active business is over about $400 to 500K, it won’t save anything. The 30% will already be in a lower bracket anyway.
Participant[quote=flu]
Well, I am happy that a lot of people now understand what I have said all along.
W2 salaried upper income middle class always get screwed when it comes to any sort of tax reform…. For whatever reasons, politicians always like to think upper income salaried slaves are rich, meanwhile leaving corporations and the really rich alone. [/quote]
It is that way if we elect Republicans. I understand your logic in not wanting all the power in the hands of one party. But historically, tax cuts for capital is always a target aimed for by republicans. Tax cuts for labor comes from Democrats.
Cuts to taxes on income generated by capital increases inequality, and makes it more difficult, no matter how much you earn from work, from getting rich. They are designed to make rich richer.
Tax preferences for labor, during my lifetime, have only and always come from Democrats. Those are the tax cuts that create jobs. Those are the tax cuts that decrease income inequality.
Participant[quote=harvey]
Maybe I’m misunderstanding the rule, but here’s and example of what I thought this was about:
General contractor owns an LLC, brings in $300K net, pays himself $150K salary and takes the rest as pass-thru business income. Currently he gets taxed as if his total income were $300K, which would mean a 33% marginal rate for everything over $191K.
Under proposed rules his W2 income would be $150K and the other $150K would only be taxed at 25%.
I’m not sure where capital invested fits in, but maybe I’m oversimplifying something.[/quote]
Nope. Doesn’t work that way. First, that GC literally CAN’T pay himself on a W-2. Against current rules. All goes on schedule C if it’s a single member LLC. Under proposed law, substantially all his income would be taxed as if it is all W-2 income. Only passive income is taxed at the preferred rate. Schedule C income, for a business the owner works in, (or a similar LLC, with more than 1 partner, filing a partnership tax return) is, as a matter of law, not passive income, ergo, no tax preference under proposed law.
There probably WILL be ways around that problem, designs that make the tax preferences for that GC possible. That’s the shit I’ve been paid to find. But the law is designed, only non-working interests get the lower rate. It’s for investors. Not for taxpayers who start and grow small business.
And it’s clearly and unequivocally NOT a tax simplification.Participant[quote=harvey]
Pass-through income capped at 25% is a big win for top income earners. It will be interesting to see how many executives become consultants instead of employees.[/quote]
It is not a tax cut for top income earners. Almost just the opposite. It is a tax cut for those with large amounts of capital invested.
This is a pretty complicated section of the law, as written. At least, if not more complicated than the §469 passive loss limitation rules that came in during the mid-80’s. It appears that it won’t lower tax for executives becoming consultants. It will lower tax for investors in big businesses structured as pass-through entities. It will only lower tax on investment income from operating businesses, not income from labor.
It won’t lower tax for real small businesses. The plumber next door that wants to buy a 2nd truck and hire a 2nd crew, or a 10th crew, isn’t going to get much benefit. Doctors, lawyers, consultants, real estate professionals, in private practice won’t get any advantage. It is truly a capital over labor tax preference. Any politician who describes it as a tax break for small business owners is out and out lying. It is anything but that.
If passed, it will exacerbate income inequality. The rich will get richer. The workers will suffer. With all due respect to someone here who correctly hailed swamps as centers of life, this is the exact opposite of the draining of the swamp that Trump campaigned on.
Participant[quote=svelte][quote=FlyerInHi]
What’s wrong with Trump and his people telling lies and digging deeper.
Just apologize to Miesha, Johnson’s widow, and say she misunderstood the intent of Trump’s words.[/quote]Impossible, that would have been the smart thing to do. :-)[/quote]
That would be the Trump way to apologize. To put the onus on the gold star wife. Apologize and still make her responsible. Though he’ll never do that either. The respectful way to apologize would be to accept responsibility for not making himself clear. That he made the mistake, not her.
Participant[quote=svelte]
Kelly is now stepping into the political dogfight. Had to discuss the death of his son, Rep. Wilson. He has now been dragged into the mud up to his knees.When it gets waist deep, he’ll probably start looking for the exit sign. We may still be on track for a December exit, we’ll see.[/quote]
He’s already up to his neck in it. He’s proved that he’s just as comfortable as his boss telling lies.
October 12, 2017 at 7:56 PM in reply to: do you need a licensed contractor to change a gas cooktop #808153ParticipantEither it was done by a licensed GC or it was done by a handyman. There is no such thing in California as an unlicensed general contractor. I’m pretty sure the law is still that if the total cost is $500 or more, a GC is required.
If someone is qualified to do this kind of work, there’s not many good reasons for them not to get their license.
ParticipantWe are always in a business cycle.
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