GOP tax plan analysis for NYC residents
Now that the tax brackets have been released and the plan has a 90%+ chance of passing, I ran some numbers for NYC people before and after, using the current tax brackets as are shown in the links below.
These numbers take into account the changes in Federal tax rates, and the changes to deductibility of NY State and City taxes, which go from being fully deductible to a capped deductible of $10k. It does not take into account mortgage interest deductibility, property taxes, or other adjustments.
Under the new plan, most middle class filers (<$500k Married or <$250k Single) will see lower taxes, while filers who make more than that will see tax increases that have some proportionality to their excess income. Don’t forget to lower the gross income by deductions related to retirement and health savings accounts, and other things like that.
Married filers benefit more from the plan, due to its more favorable tax brackets for married filers. High income earners benefit less from the plan, due to loss of deductibility of state and local taxes.
If you own a house with high property taxes, you will lose more from the plan. If you live somewhere with lower SALT (anywhere that is not NYC basically), you will benefit more from the plan.
Edit: I’ve changed the numbers so that they assume the filers under my scenario will choose the new tax plan’s standard deduction ($24k for Married, $12k for Single), over the $10k deduction for SALT that only applies to itemized tax returns. You would choose to itemize deductions if you have other deductible expenses, such as mortgage interest, that would increase your itemized deductions to some level that exceeded the standard deduction.
Positive number means higher taxes.
Married Filing Jointly
$1 million: +1.6k
$2 million: +18k
$1 million: +21.9k
$2 million: +46.4k
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