Then we could pay real wages and from them make real deductions, thus inculcating not only the habit of an orderly working day which is foreign territory to most of them, but also the habit of an orderly use of earnings.
My prior posts entitled Proposed Regulations Blow The Roof Off Of Many Real Estate Deductions, Does Rental Income Qualify For The New 20% Section 199A Deduction?
Suppose a taxpayer makes $150,000 a year and writes off $75,000 in interest payments and $15,000 in real estate deductions.
In other words, if a married couple earns $50,000 per year or more, they have to pay the AMT and the majority of their real estate deductions evaporate.
Moreover, because deductions are worth les when tax rates are lower, homeowners in tax brackets higher than 15% will see the value of their real estate deductions dip due to the reduction in income tax rates.
Camp's big bill, which would attempt to lower individual and corporate income tax rates to a maximum of 25%, is expected to call for significant cutbacks in or elimination of prized real estate deductions for home mortgage interest, local property taxes and other write-offs to pay for lower marginal rates.
This means that the same taxpayer cited above who is in the 39.6% bracket, upon claiming a $1,000 real estate tax deduction, would only receive a deduction worth $1,000 *.28 or $280.
That means you can deduct 335 days of those two big-ticket items on Schedule A of your tax return (subject to losing the real estate tax deduction in the AMT).
Under current law, a taxpayer in the 39.6% bracket who claims, for example, a $1,000 real estate tax deduction would reduce their taxes by $1,000*.3966, or $396 (before considering the Pease limitation, which reduces itemized deductions for certain high-income taxpayers).
