Saturday, January 06, 2018
The standard deduction for single taxpayers and married couples filing separately is $6,350 in 2017, up from $6,300 in 2016; The personal exemption amount for 2017 is $4,050, the same as 2016.
so, same.
6350+4050=10,400 untaxed net income, if by untaxed i exclude fica.
Yes, the standard deduction has roughly doubled for all filers, but the valuable personal exemption has been eliminated. For example, a single filer would have been entitled to a $6,500 standard deduction and a $4,150 personal exemption in 2018, for a total of $10,650 in income exclusions. Under the new tax plan, they would just get a $12,000 standard deduction. Is it better? Yes. But it's not really "doubled."
So only $1350 more next year is safe from the 10% tax of the first bracket, a modest bump to cover cost of living, but not a revolution.
So to avoid income tax, I have to keep my net taxable income under $12K. That should be doable. Avoiding fica is more difficult; it requires zero earned income.
I think most of my income this year, if any, will be capital gains from selling real estate, so i should be able to reinvest those within the window. I can do a little contract work that is mostly just balanced out by expenses, about 5K each. I can receive up to 10K in gift income without being taxed on it. I have about 5K in investment income a year. I can temp a bit andd make up to 7K in wages. So I could bring in about $22K a year without being taxed, plus whatever capital gains, which are defered if reinvested, maybe. Or is that limited to my personal residence? Anyway, given that I live in flyover country with a low cost of living, I can live comfortably on up to 22K a year, especially if I'm doing some real estate deals on top of that. I currently support one dependant, but I don't claim him on my taxes.
I prefer not to pay income tax, and try to plan my income accordingly, making just a little under the taxable limits, but in those few years when I make too much I pay it.
Over the years, a lot of my efforts have gone into how to live better with less, instead of trying to make more. Part of that has been doing stuff free online instead of spending money to do a similar thing in realspace.
so, same.
6350+4050=10,400 untaxed net income, if by untaxed i exclude fica.
Yes, the standard deduction has roughly doubled for all filers, but the valuable personal exemption has been eliminated. For example, a single filer would have been entitled to a $6,500 standard deduction and a $4,150 personal exemption in 2018, for a total of $10,650 in income exclusions. Under the new tax plan, they would just get a $12,000 standard deduction. Is it better? Yes. But it's not really "doubled."
So only $1350 more next year is safe from the 10% tax of the first bracket, a modest bump to cover cost of living, but not a revolution.
So to avoid income tax, I have to keep my net taxable income under $12K. That should be doable. Avoiding fica is more difficult; it requires zero earned income.
I think most of my income this year, if any, will be capital gains from selling real estate, so i should be able to reinvest those within the window. I can do a little contract work that is mostly just balanced out by expenses, about 5K each. I can receive up to 10K in gift income without being taxed on it. I have about 5K in investment income a year. I can temp a bit andd make up to 7K in wages. So I could bring in about $22K a year without being taxed, plus whatever capital gains, which are defered if reinvested, maybe. Or is that limited to my personal residence? Anyway, given that I live in flyover country with a low cost of living, I can live comfortably on up to 22K a year, especially if I'm doing some real estate deals on top of that. I currently support one dependant, but I don't claim him on my taxes.
I prefer not to pay income tax, and try to plan my income accordingly, making just a little under the taxable limits, but in those few years when I make too much I pay it.
Over the years, a lot of my efforts have gone into how to live better with less, instead of trying to make more. Part of that has been doing stuff free online instead of spending money to do a similar thing in realspace.
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