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Senate Tax Bill will hurt Mormon tithe payers

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2 hours ago, Darren10 said:

So, anything above $2600 is not deductible? No doubt it would hurt those with high medical costs. 

Our family of six is reasonably healthy, but even so, $2,600 has not been nearly enough. We were maxed out on our flexible spending account by September of this year. That's not very hard to do if your kids need braces, for example.

The way it works is this: You designate a certain amount of your earnings up to $2,600 a year to go directly into a tax free account. From that account, you may pay out-of-pocket health care expenses, those not covered by insurance. If you don't use all of the money for a given year, you lose the remainder. However, up through last year, you had until April of a given year to use all of the previous year's FSA funds. They have now eliminated that provision, but they now allow you can carry over a certain amount of FSA money into the next year.

Until we were beset with Obamacare, the amount of money you could designate for FSA was unlimited. Obamacare initially capped it at 2,500. Over the next few years, the cap was gradually increased to $2,600.

I say the cap should be eliminated altogether. It's just one reason why I say that the middle class generally gets thrown under the bus when public policy decisions are made regarding social spending, decisions that benefit either the very poor or the very rich.

Edited by Scott Lloyd
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I prefer the HSA but I am a single guy with minimal health care needs. I contribute up to the cap and reimburse myself for medical expenses if I need the money. If not, I stockpile it.

While I like the mortgage interest deduction since I bought a house this year I have been overpaying the mortgage which pushes that benefit down. My plan is to pay it off in eight years though ten is probably more realistic.

I dislike the new tax plan. It is a love letter to the wealthy and a mixed bag to the middle class. The poorer classes will get a pittance if they double the standard deduction but that is about it. There is not much you can do to aid the poor other then more policies like earned income credit which is probably not feasible politically right now.

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17 minutes ago, ttribe said:

Let's see the list of things that will hit me in the pocketbook -

- No more charitable deduction? Check.

- No more medical expense deduction (I've gone out of pocket $30k in each of the last three years fighting my kids' illnesses)? Check.

- No more mortgage interest deduction? Check.

In short, I'm screwed.  I have a six-figure income and can make more adjustments than the average citizen, but I'm certainly not being spared the pain.

They are not getting rid of the charitable deduction or mortgage deduction. The senate bill would not get rid of the medical expense deduction. The House bill is much worse for me than the Senates. You would still lose the per person exemption but if your kids are under 18, you will come out even or ahead. I am sorry you are dealing with so many medical expenses. I know sick children are incredibly stressful and then the financial burden only increases the stress levels. 

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On 11/29/2017 at 5:05 PM, Scott Lloyd said:

Our family of six is reasonably healthy, but even so, $2,600 has not been nearly enough. We were maxed out on our flexible spending account by September of this year. That's not very hard to do if your kids need braces, for example.

The way it works is this: You designate a certain amount of your earnings up to $2,600 a year to go directly into a tax free account. From that account, you may pay out-of-pocket health care expenses, those not covered by insurance. If you don't use all of the money for a given year, you lose the remainder. However, up through last year, you had until April of a given year to use all of the previous year's FSA funds. They have now eliminated that provision, but they now allow you can carry over a certain amount of FSA money into the next year.

Until we were beset with Obamacare, the amount of money you could designate for FSA was unlimited. Obamacare initially capped it at 2,500. Over the next few years, the cap was gradually increased to $2,600.

I say the cap should be eliminated altogether. It's just one reason why I say that the middle class generally gets thrown under the bus when public policy decisions are made regarding social spending, decisions that benefit either the very poor or the very rich.

 

On 11/29/2017 at 5:14 PM, The Nehor said:

I prefer the HSA but I am a single guy with minimal health care needs. I contribute up to the cap and reimburse myself for medical expenses if I need the money. If not, I stockpile it.

While I like the mortgage interest deduction since I bought a house this year I have been overpaying the mortgage which pushes that benefit down. My plan is to pay it off in eight years though ten is probably more realistic.

I dislike the new tax plan. It is a love letter to the wealthy and a mixed bag to the middle class. The poorer classes will get a pittance if they double the standard deduction but that is about it. There is not much you can do to aid the poor other then more policies like earned income credit which is probably not feasible politically right now.

Government mandates aside I think the best firm of healthcare insurance are HSAs. 

Nehor;

Gold plan.The sooner you get your home paid off the better for you. Good luck. 

Edited by Darren10

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2 minutes ago, bsjkki said:

They are not getting rid of the charitable deduction or mortgage deduction. The senate bill would not get rid of the medical expense deduction. The House bill is much worse for me than the Senates. You would still lose the per person exemption but if your kids are under 18, you will come out even or ahead. I am sorry you are dealing with so many medical expenses. I know sick children are incredibly stressful and then the financial burden only increases the stress levels. 

I was just about to look into this. I heard the same about the tax plan not eliminating charitable or mortgage deductions.

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21 minutes ago, Darren10 said:

 

Government mandates aside I think the best firm of healthcare insurance are HSAs. 

Nehor;

Goid plan.The sooner you get your home paid off the better for you. Good luck. 

Currently, you can only get an HSA with a high deductible plan and that doesn't work for those of us with known, chronic health needs.

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26 minutes ago, bsjkki said:

They are not getting rid of the charitable deduction or mortgage deduction. The senate bill would not get rid of the medical expense deduction. The House bill is much worse for me than the Senates. You would still lose the per person exemption but if your kids are under 18, you will come out even or ahead. I am sorry you are dealing with so many medical expenses. I know sick children are incredibly stressful and then the financial burden only increases the stress levels. 

Clearly, I haven't stayed abreast of this...been very busy . Either way, I'm now of the opinion that no one on Capitol Hill knows what they are doing with respect to economics.

1 minute ago, bsjkki said:

Currently, you can only get an HSA with a high deductible plan and that doesn't work for those of us with known, chronic health needs.

That's what we're on; it's killing us.  We've hit our family max out of pocket in each of the last three years.  Unfortunately, all the "not-covered" stuff doesn't count against that out of pocket max, hence the $30k number.

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3 hours ago, Darren10 said:

"the GOP is trying to reward their wealthiest donors with an extravagant gift, at the expense of most of their constituents" - I hope not. Who would these be?

"Also, they're almost entirely bereft of leadership." - You got that right. 

DonorTaxCutColum-figs1-693px.png

Pretty good ROI for wealthy donors.

 

 

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6 minutes ago, ttribe said:

Clearly, I haven't stayed abreast of this...been very busy . Either way, I'm now of the opinion that no one on Capitol Hill knows what they are doing with respect to economics.

That's what we're on; it's killing us.  We've hit our family max out of pocket in each of the last three years.  Unfortunately, all the "not-covered" stuff doesn't count against that out of pocket max, hence the $30k number.

I am so sorry. I have seen things go down hill fast with Obamacare for covered expenses. Now you have percentage based copays with prescription tiers (tier 2--what a joke) and your doctor doesn't get to decide what drug you should take, your insurance company does. It makes being sick very hard and stressful and there are so many more hoops to jump  through to get basic needs met. I think All medical expenses should be deductible for all Americans. I have a friend whose husband declined all raises for 5 years because his little girl had cancer and they could not risk losing medicaid or they would not be able to afford her care. She passed away at 7-years-old. Our system sucks but I still don't think our government could efficiently run single payer either. I would worry about more restrictions and no incentives for innovation. 

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7 minutes ago, bsjkki said:

I am so sorry. I have seen things go down hill fast with Obamacare for covered expenses. Now you have percentage based copays with prescription tiers (tier 2--what a joke) and your doctor doesn't get to decide what drug you should take, your insurance company does. It makes being sick very hard and stressful and there are so many more hoops to jump  through to get basic needs met. I think All medical expenses should be deductible for all Americans. I have a friend whose husband declined all raises for 5 years because his little girl had cancer and they could not risk losing medicaid or they would not be able to afford her care. She passed away at 7-years-old. Our system sucks but I still don't think our government could efficiently run single payer either. I would worry about more restrictions and no incentives for innovation. 

We spent almost 2 years fighting with our insurer to get IVIG treatment approved for our oldest (it's five-figures per dose/month).  Now it's looking like we'll have to take up the fight for that same treatment for each of other two kids.  I don't know what the health insurance answer is in the U.S. at this point, but sure isn't this.  "Affordable" Care Act, my a**.

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6 hours ago, Darren10 said:

Every year I try to use tithing to itemize but it’s never enough for me to make any difference on my taxes. The very wealthy may see a difference with the amount of tithing they pay but not the “typical” Mormon. So perhaps only the top wealthy Mormons will see any difference. 

Those who have to pay a lot in medical often itemize as well from what I have done and heard, they may not be able to donate as much.

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3 hours ago, bsjkki said:

$2500 and now $2600. With Obamacare’s heigher deductibles and higher out of pocket maximums, having this capped hurts those with chronic health conditions. 

That is about 3 months cost for us, possibly less as I have been ignoring it the past couple of years.  We pay huge up front and max out every year due to diabetes supplies and expensive meds (mine amount to around  $300 a month, my daughter's at least $500, this year she has started ECT treatment...if that or the magnetic alternative doesn't work, it is $700 a dose ketamine infusions...which starts at likely $7000 and then booster shots added on, which might even be needed weekly if comparable to ECT at the moment...we are hoping it extends its effects longer soon as she just finished the first month long series).

My daughter is over 26.  We could find nothing to cover her since she has never had a job, but thankfully the university put its foot down and insisted the insurance keep covering her...which means my husband will work for them as long as he can (meaning death) unless things dramatically change.

we were hoping to start a trust for her this year for care after we are gone, not sure how the change will affect those plans.  We can't afford to downsize either.

Edited by Calm
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44 minutes ago, bsjkki said:

Currently, you can only get an HSA with a high deductible plan and that doesn't work for those of us with known, chronic health needs.

Usually no but with the options at my employer I think I might take the high deductible plan over the other options anyways if I had chronic health problems figuring I would hit the Out of Pocket Maximum every year in any case and they are almost identical so might as well pay less for the plan. The only difference is hitting the maximum a little earlier in the year.

My main concern for all the tax plans is they are a huge love letter to the wealthy. Republicans are stuck. From what I hear their high-dollar donors are demanding this, the few remaining Tea Party enthusiasts find it violates their principles, and the deficit hawks are pulling their hair out over it. Removing the AMT is also insane. That was a safeguard against extreme tax avoidance strategies for the wealthy and it is on the table for removal.

My gut says this tax plan will not pass but it has been wrong before. There is a reason we only do major revisions in the tax plan once every generation or so and why it generally only happens with a popular unifying president with at least some bipartisan support and tends to spend a lot of their political capital on it (Reagan was the last one). I don't think we are in a fit state politically for a major tax rewrite even though I do think we should cut taxes in some areas though I think we should raise them in others.

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4 hours ago, longview said:

A sad commentary on today's society.  I just completed 12 weeks course on Financial Self Reliance in my stake.  I learned quite a bit.  One major counsel is to be strict about living within your means.  That requires preparing for as good of a career as you know how and optimize your income (reasonable level to counter competition).  With that in mind, find a house that is fairly modest without extravagant upholstering and used vehicles.   Should be able to have an enjoyable life with family in an independent manner.   Budgeting is important in avoiding surprises and bondage.

Yeah, like those of us with high medical costs got them because we weren't paying attention to a budget and thus it is our own fault we haven't been able to live within our means all the time.

And buying a frugal house that can hold all your kids and then not being able to move after they have moved out because housing has gone up too much in the area because of masses moving into the area and the local government not living up to its commitments and the house has therefore moved into the not so frugal category, yeah, another thing we could have so easily foreseen.

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5 hours ago, bsjkki said:

Currently, you can only get an HSA with a high deductible plan and that doesn't work for those of us with known, chronic health needs.

Yeah, probably not. 

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5 hours ago, Gray said:

DonorTaxCutColum-figs1-693px.png

Pretty good ROI for wealthy donors.

 

 

Is the estate tax cut the elimination of the death tax? If so, good riddance. Lots and lots of Democrat donors will benefit as well (but I say not force the, to pay less if they don’t have to). So will you and I were we to get rich. 

https://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax

 

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11 hours ago, Jeanne said:

Wow...I just can't imagine this.  I still kind of struggle on my own little place.  My tax man is quite a professional and itemizes everything for me which has saved me a lot of money.  Plan to retire soon so this tax stuff is important to me...tithing or not.

When I bought my home it cost $130,000. Today it is listed at over $350,000. Young people today can no longer afford to buy my home.

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1 hour ago, Darren10 said:

Is the estate tax cut the elimination of the death tax? If so, good riddance. Lots and lots of Democrat donors will benefit as well (but I say not force the, to pay less if they don’t have to). So will you and I were we to get rich. 

https://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax

 

The estate tax is the death tax, and starts to kick in at $10,000,000. It affects about 2 tenths of 1 percent of the population. It's intent was to prevent monied dynasties from controlling the political process for generations. So you determine the fairness of a tax based on the political persuasion of a small minority of citizens.

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14 hours ago, bsjkki said:

Currently, you can only get an HSA with a high deductible plan and that doesn't work for those of us with known, chronic health needs.

One of the very best things my wife did for our family was sign us up for a high deductible plan. She did so a year or two before my diagnosis with a chronic disease (which results in uninsured costs of >$100,000). This year past year with my daughter would have been real bad with uninsured costs over >$500,000. Since the HSA can also be applied to braces but the insurance doesn't directly apply, that has also been good. That her work supplements the HSA with the difference her employer would pay between a normal deductible and the HSA is nice too.

Maybe HSA's aren't for everybody, but for me and my family, it was an inspired move by my wife (before the medical stuff hit the fan as it were).

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Sorry to hear about the medical issues.  Seems like everyone is getting hit these days.

It is one thing easier to bear, imo, believing others aren't having to go through it.  I would rather be 'special' and others avoiding this type of struggle.  There just seem a lot more struggles that are more effective in helping us progress.

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I guess trials are just one of those things that are part of mortality to help us grow. I can take consolation in that some of my trials are externally imposed as opposed to self-inflicted. The Gospel is a great tool (if not the best) in helping us avoid self-inflicted trials. I can also take consolation in the idea that mortality really is just a flash in the pan is it were. :)

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9 hours ago, thesometimesaint said:

The estate tax is the death tax, and starts to kick in at $10,000,000. It affects about 2 tenths of 1 percent of the population. It's intent was to prevent monied dynasties from controlling the political process for generations. So you determine the fairness of a tax based on the political persuasion of a small minority of citizens.

It is amazing how optimistic many Americans are expecting this will apply to them.

There is an outside chance it might hit my inheritance but I am still okay with it. If I make it through retirement and dying with more then 10 million I am okay with the government taking a cut of what is left. I will not hold my breath on that though.

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22 hours ago, rpn said:

The standard deduction is going way up.   I calculated that you'd have to be paying on a 300,000 home and earning more than 80K a year (paying on gross) for this to be an issue for for any member.   I'm okay with that.  

That's an average house in the 'burbs in most large metro areas (and below average in the really large metros). and if you have that you're probably making over $80K a year

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50 minutes ago, The Nehor said:

It is amazing how optimistic many Americans are expecting this will apply to them.

 

It will affect most family farmers and family-owned businesses. So yes, its important.

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