Washington is telling us that under the new tax plan, nearly everyone will get a reduction in 2018 taxes. For seniors, I would urge you to calculate your projected 2018 income taxes using the Trump tax calculator that can be found online. If you have income in addition to your social security benefits, you are in for a big surprise. Whereas you were taxed only on a portion of your Social Security benefits in past years, you will now pay taxes on all of it plus any other income, less the $24,000 exemption. For a senior couple in 2016 with total income of about $57,000 of which $30,000 was social security income, the tax liability was near $1000. Using the Trump tax calculator plugging the same numbers, the tax liability will be over $3000. Can somebody please show me that I am wrong.
You seem to be counting all social security as income or part of the AGI before you enter into those calculators. You must get AGI first (without SS), to determine S.S. subject to taxation, same as before. My taxes will be about $900 less on the new tax plan.
To help me understand, can you please tell me your reference about calculating AGI first? I haven’t been able to find that specific information anywhere.
Example of 2016 income... $30,000 S.S. of which only $5,000 is taxable... $27,000 income from other sources. Add the $27,000 and $5,000 to get $32,000 taxable income. Subtract deductions for filing joint, personal exemptions and if applicable over 65, etc. (The aforementioned totaling about $23,000) Amount subject to taxes is then taxed at 10% up to $18k+ In your example it was around $1,000 The 2018 return, with changes highlighted... $30,000 S.S. of which only $5,000 is taxable... $27,000 income from other sources. Add the $27,000 and $5,000 to get $32,000 taxable income. Subtract deductions for filing joint, personal exemptions and if applicable over 65, etc. Subtract $24,000 Amount subject to taxes is then taxed at 10% up to $18k+ $19K+ Roughly speaking, you should be around $900 taxes due or approximately $100 less than previous. The method for calculating social security subject to tax, remains the same.
I have gone to a number of 2018 tax calculators online and they all give me the same numbers. For the time being, I am sticking with my original statement.