Celebrating 10 years! 2007-2017

No more student loan interest deduction?

http://www.businessinsider.com/trum p-gop-tax-reform-plan-bil 6figuremistake11/02/17
I don't see this passing as it is. The way he wants to chan caj11111/02/17
Rumors are already circulating that it would even get out of spaghetti11/05/17
do you mean "not" even get out of W/M cmte? inho2solo11/05/17
Tax and policy makers really seem to hate the student loan i dupednontraditional11/04/17
Even doing doc review I've never been able to use the studen notreallyalawyer11/02/17
Really? You don't need to itemize to get the deduction. 6figuremistake11/02/17
It phases out above a certain amount maybe I did it for a ye notreallyalawyer11/02/17
yeah, it goes away if you make more than 60K. You can usual bittersweet11/08/17
The only two personal deductions left are the deductions tha triplesix11/02/17
Haha. Loss of the alimony deduction. [[edit, didn't realize superttthero11/02/17
Honestly though, is it really such a bad thing to disincenti tedandlisa12311/02/17
What? That's downright UN-AMURKIN! 😁 inho2solo11/04/17
There are those of us who have roots here - friends, family, guyingorillasuit11/04/17
I thought dudes in the midwest should leave their roots behi karlfarbman11/06/17
Two completely different scenarios. In the first scenario, p guyingorillasuit11/06/17
To those who may be losing the SL deduction - out of curiosi inho2solo11/04/17
The standard deduction for 2017 is $6,350 and $12,700 for ma specv31311/04/17
Thanks. So looking at this one thing in a sort of artificial inho2solo11/04/17
Unless you itemize. guyingorillasuit11/06/17
They're doubling the standard deduction, but aren't they als perkinwarbeck11/04/17
Agreed. While the other proposed changes make the student l dupednontraditional11/06/17
The loss of alimony deduction is huge! cocolawyer11/05/17
So much for the war on women. It's no longer deductible for notreallyalawyer11/05/17
Yep. Think of all the people out there with non-modifiable s guyingorillasuit11/05/17
It's a pure money grab. It's much more likely that the perso thirdtierlaw11/06/17
Boomers got to pay for decades of sexism. There is a silver triplesix11/06/17
Is this part of making America great again? bigsal11/05/17
It's making some Americans great again at the expense of oth guyingorillasuit11/06/17
The standard deduction goes from $6,300 to $12,000 for a sin flyer1411/08/17
As another poster noted, the Trump plan also eliminates the specv31311/08/17
Did this also take into account the change of thresholds for flyer1411/08/17
Never stop shilling 🍯 pot triplesix11/08/17

6figuremistake (Nov 2, 2017 - 2:49 pm)

http://www.businessinsider.com/trump-gop-tax-reform-plan-bill-text-details-rate-2017-10

"Elimination of most personal itemized deductions and many credits. The only deduction preserved explicitly in the plan is for charitable gifts and edited home-mortgage interest. Some of these include:

Elimination of the student-loan-interest deduction: The amount paid toward student loan interest can currently be deducted."

In fairness, the standard deduction goes up considerably under this plan, but this deduction was the only "bright spot" when being saddled with six figures of debt.

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caj111 (Nov 2, 2017 - 3:13 pm)

I don't see this passing as it is. The way he wants to change the itemized deductions and child tax credits reduces revenue by an estimated $ 1.5 trillion alone. The corporate tax cuts reduces revenue by another trillion. Removing the student loan interest deduction and changing education credits increases revenue by an estimated $ 47 billion. Some of the other changes will increase revenue, but nowhere the amount estimated to be lost. Representatives from New Jersey, New York and California (Republican and Democrat alike), where state and local taxes are generally the highest, are especially pissed off by the proposed $ 10,000 limit on the itemized deduction for state and local taxes.

He's also managed to piss off the building & real estate industry long before this ever came to light, because his proposed increased to the standard deduction would result in far less of an incentive to own a home, unless it is super-expensive with high property taxes. Charities are pretty pissed off too as there would be less of an incentive to donate money. Some charities are run by powerful rich families and people with a lot of sway in Congress.

I don't see this going through the way it is proposed.

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spaghetti (Nov 5, 2017 - 12:00 am)

Rumors are already circulating that it would even get out of the Ways and Means committee. This bill will change a lot.

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inho2solo (Nov 5, 2017 - 12:59 am)

do you mean "not" even get out of W/M cmte?

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dupednontraditional (Nov 4, 2017 - 8:11 am)

Tax and policy makers really seem to hate the student loan interest deduction. It was never much to begin with (I'll take it regardless) and they phase it out quickly. I don't understand what the message is other than "screw you young-ish people, haha."

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notreallyalawyer (Nov 2, 2017 - 2:58 pm)

Even doing doc review I've never been able to use the student loan interest deduction, ever.

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6figuremistake (Nov 2, 2017 - 3:07 pm)

Really? You don't need to itemize to get the deduction.

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notreallyalawyer (Nov 2, 2017 - 3:16 pm)

It phases out above a certain amount maybe I did it for a year back in 2003 can’t remember

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bittersweet (Nov 8, 2017 - 7:21 pm)

yeah, it goes away if you make more than 60K. You can usually do that doing doc review in a major city if you don't have long layoffs, big conflicts or a crappy economy.

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triplesix (Nov 2, 2017 - 3:00 pm)

The only two personal deductions left are the deductions that benefit old and rich... I love it!

Where are those death panels and communists when you need them most?

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superttthero (Nov 2, 2017 - 3:03 pm)

Haha. Loss of the alimony deduction. [[edit, didn't realize I was in law]]

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tedandlisa123 (Nov 2, 2017 - 3:29 pm)

Honestly though, is it really such a bad thing to disincentive people from buying overpriced homes in high cost coastal blue states?

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inho2solo (Nov 4, 2017 - 8:38 am)

What?

That's downright UN-AMURKIN! 😁

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guyingorillasuit (Nov 4, 2017 - 1:37 pm)

There are those of us who have roots here - friends, family, etc. We can't all pack up and head for low-COL areas. You wouldn't want us there, anyway. When a small entry-level condo costs over a million dollars, the Republican plan is disincentivising home ownership.

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karlfarbman (Nov 6, 2017 - 8:45 am)

I thought dudes in the midwest should leave their roots behind and go to San Fran by the truckload to weld for $60/hr, yet you can't pack up and leave?

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guyingorillasuit (Nov 6, 2017 - 7:50 pm)

Two completely different scenarios. In the first scenario, people with no jobs are being offered an opportunity which requires a sacrifice - i.e. leaving their roots behind. No one is forcing them to move. They could stay behind and continue doing what they're doing. In the second scenario, the government is imposing a separate tax on a large number of blue state households on the theory that a $500,000 mortgage is a "luxury".

The second scenario is closer to a liberal administration coming in and taxing all family farms over 10 acres, because "farmers don't vote for us anyway." If the farmers don't like it, they can sell half the farm, or simply move to a smaller farm, right? Like if people in SF don't like the new tax, they can just move?

Or, a liberal administration could propose an emission tax, where anyone buying a car which emits more than Prius would be taxed an extra 100% on the purchase. People with high emission cars and trucks don't vote for us anyways. If they don't like it, they can change what they drive.

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inho2solo (Nov 4, 2017 - 8:37 am)

To those who may be losing the SL deduction - out of curiosity, what is the difference between the amount you deducted last year (std + SL or total itemized + SL) vs what you'd get with the new, larger std deduction?

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specv313 (Nov 4, 2017 - 9:17 am)

The standard deduction for 2017 is $6,350 and $12,700 for married filing jointly. Under the proposed plan these amounts would double. The student loan interest deduction is capped at $2,500.

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inho2solo (Nov 4, 2017 - 11:09 am)

Thanks. So looking at this one thing in a sort of artificial isolated way, the increase in standard deduction swamps the SL interest deduction.

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guyingorillasuit (Nov 6, 2017 - 7:51 pm)

Unless you itemize.

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perkinwarbeck (Nov 4, 2017 - 2:15 pm)

They're doubling the standard deduction, but aren't they also getting rid of the personal exemption? That would make it almost a wash.

The student loan interest deduction is almost useless because of the mean income phase out. It's just kind of an insult when they're leaving capital gains (and carried interest) untouched while making sure rich kids can inherit 5 million plus tax free. They're getting rid of my puny deduction to finance this shit?

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dupednontraditional (Nov 6, 2017 - 6:41 am)

Agreed. While the other proposed changes make the student loan deduction a bit of a wash, the current talk is to still allow some mortgage interest deduction, some property tax deduction, etc. If they are doing that, they could allow an additional 2500 for student loans.

Ultimately, it's still about picking winners and losers.

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cocolawyer (Nov 5, 2017 - 6:04 pm)

The loss of alimony deduction is huge!

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notreallyalawyer (Nov 5, 2017 - 6:13 pm)

So much for the war on women. It's no longer deductible for the men who pay it, and it's no longer income to the women who get it.

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guyingorillasuit (Nov 5, 2017 - 7:51 pm)

Yep. Think of all the people out there with non-modifiable support orders.

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thirdtierlaw (Nov 6, 2017 - 6:27 am)

It's a pure money grab. It's much more likely that the person paying alimony is in a higher tax bracket than the person receiving the spousal support.

At an individual level, many times, it's adding insult to injury. They're forced to give half their income to their ex, but now they're responsible for paying that person's taxes as well.

I guess they need to make up for the lower corporate and top tax bracket somewhere.

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triplesix (Nov 6, 2017 - 9:09 am)

Boomers got to pay for decades of sexism. There is a silver lining here!

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bigsal (Nov 5, 2017 - 11:00 pm)

Is this part of making America great again?

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guyingorillasuit (Nov 6, 2017 - 7:53 pm)

It's making some Americans great again at the expense of other Americans, and at the expense of everyone's children except for the richest of the rich. All American children inherit an extra $1.5TT worth of debt, but the top 0.1% don't have to pay any estate tax, so they'll be fine.

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flyer14 (Nov 8, 2017 - 9:32 am)

The standard deduction goes from $6,300 to $12,000 for a single person and from $12,600 up to $24,000 for a married couple.

I think that increase will more than offset the loss of the $2500 student loan deduction.

***

I'm in support of simplifying the tax code. We have separate lines for "student loan deduction", "tuition and fees deduction", and then "American opportunity credit", both refundable and nonrefundable portions. Time to just pick one and stick with it.

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specv313 (Nov 8, 2017 - 10:01 am)

As another poster noted, the Trump plan also eliminates the personal exemption. For a single taxpayer in 2017 that amount is $4,050. Assuming that you claim the full $2,500 student loan interest deduction, a comparison between the Trump plan and status quo for single filers shows that it's pretty much a wash:

Status Quo: $6,350 (Std. Deduction) + $4,050 (Per. Exemp) + $2,500 SL Deduction = $12,900
Trump Plan: $12,000 (Std. Deduction) - Personal exemption and SL interest deduction eliminated

For a number of posters on here the amount of their taxable income would actually increase by $900 under the Trump plan.

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flyer14 (Nov 8, 2017 - 10:11 am)

Did this also take into account the change of thresholds for tax brackets?

Currently, the first $9k of taxable income is taxed at 10%, anything from $9k to $37k is taxed at 15%, and then from $37k on up the tax rate is 25%.

The Trump plan, in addition to increasing deductions, would not have the 25% tax bracket kick in until $45k.... and everything from 9k to 37k also sees a cut from 15 to 12%.

I did the math and I'd save about $2,500 a year and I would no longer have to itemize. Even though my taxable income would rise by about $2,000.

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triplesix (Nov 8, 2017 - 11:40 am)

Never stop shilling 🍯 pot

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