nycbuslady
LIF Adult
Member since 9/15 1066 total posts
Name:
|
Spin-Off to Taxes Question
The other post reminded me of this other issue I've been thinking about since they announced the new tax law. I think there's a marriage penalty in it!
There is a cap of $10K for SALT (State and Local Taxes), regardless of filing status. So, a married couple can deduct a total of $10K in SALT and a single person also can deduct $10K. The Standard Deduction, however, is $24K for married couples and $12K for single people.
So, assume this scenario:
$11,00 in property taxes $3,600 in NYS income tax for Person A $3,600 in NYS income tax for Person B $7,000 in mortgage interest $2,000 in charities, other deductions
With a $10K cap, a married couple would have $19,000 in deductions:
$10,00 in property taxes $7,000 in mortgage interest $2,000 in charities, other deductions
Since this is less than the standard deduction of $24,000, they would take the $24K.
But, if those same people are not legally married, but live together and both own the house, they can split the costs and each have $13,600 in deductions:
$5,500 in property taxes $3,600 in NYS income tax $3,500 in mortgage interest $1,000 in charities, other deductions
Since this is greater than the $12K standard deduction, they can take the full $13,600 deduction each, for a total of $27,200, which is more than the $24K that the married couple can take.
I don't know if there are other differences in the tax law, but the fact that it's $10K for everyone really bothers me!
|