IRS Return: Rags or Riches?
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35 members have voted
Quote: mipletI earned $1515 more in 2018 than in 2017, yet I'm paying $292 less in taxes.
I got refunds both years.
Yay!
Combination of increased withholding, slightly decreased income due to auto accident, structuring my business as an S-Corp, and lower taxes.
Quote: MoosetonThis thread must be for regular W2 earners only otherwise it doesn’t make sense for W2G earners.
That's what I was thinking, these people must have jobs.
Several in this thread though seem to be looking at the line two lines above the refund line. The "what you owe" line. The Trump Tax Cut helped me there, as it will help everyone who is not living in a McMansion in a high-tax state. Though I mostly help myself by understanding what expenses are business expenses and can thus legitimately reduce taxable income.
I so wish we did not have withholding as we do now and people got a quarterly bill from the IRS. That would change so many things.
let me check something for sure and I might post about it
Quote: AZDuffmanThe problem is most W-2 folks equate their refund with what they pay. They do not look at anything but the refund. Their taxes could go up by $2000 but if their refund went up by $200 they would be dancing in the street. It is what the government counts on, and the have historically used this to suit their needs.
Several in this thread though seem to be looking at the line two lines above the refund line. The "what you owe" line. The Trump Tax Cut helped me there, as it will help everyone who is not living in a McMansion in a high-tax state. Though I mostly help myself by understanding what expenses are business expenses and can thus legitimately reduce taxable income.
I so wish we did not have withholding as we do now and people got a quarterly bill from the IRS. That would change so many things.
According to my Tax Preparer, he blames my lower refund on....Drumroll please....Donald Trump!.... Surprisingly in a good way, two WOV posters actually gave very good and very sane explanations on why I got a lower refund this year.... Disturbing when WOV Posters give better explanations than a Certified Tax Preparer!
Quote: NathanAccording to my Tax Preparer, he blames my lower refund on....Drumroll please....Donald Trump!.... Surprisingly in a good way, two WOV posters actually gave very good and very sane explanations on why I got a lower refund this year.... Disturbing when WOV Posters give better explanations than a Certified Tax Preparer!
Your tax prepared is an idiot, find a new one.
But it seems you already noticed that.
Not sure who you use for tax prep, but if it is a strip mall place like HR Block, Jax-Hewitt, etc. then I will say from experience that they are not the best preparers out there. I worked there and was considered a "go-to" person my first season. Then again, maybe I was because I caught things the several year supervisor did not.
My take home pay went up about $150 per month after the tax cut.
Minus the change from this year's lower refund I think I'm ahead ~$400 in total from the tax cut.
I agree with the posters above that it is more important to look at your taxes paid year-over-year, or perhaps your tax rate (taxes/income) if we are trying to determine who benefited or was hurt by the new tax cuts.
I'm confused. Wouldn't itemizing still have been the way to go? Or did you not have as much in deductions this year?Quote: rdw4potusMy total taxes were higher this year than last year. Many aspects of the tax code simplification cut against me. I went from itemizing about $28k in deductions to taking the standard deduction of $24k for my family of 2.
Quote: SOOPOOMy federal taxes skyrocketed, (drama...) due to not being able to deduct my exorbitantly high state taxes. Basically same income, same withholding, went from 5 figure refund last ear to owing 5 figures this year. Brilliant move by Trump, punishing those in states that did not vote for him! As most high tax states (NY Cali) are Dem as they come....
I kind of like seeing the same people who claim they "didn't need a tax cut" under Bush scream when their taxes go up.
Sorry to hear yours went up, but the blue states need to start paying their fair share. CA especially.
Quote: AZDuffmanI kind of like seeing the same people who claim they "didn't need a tax cut" under Bush scream when their taxes go up.
Sorry to hear yours went up, but the blue states need to start paying their fair share. CA especially.
Of course I'd rather pay less, but the government needs to be funded so I am not very upset about the tax bill. Just the psychological part that I pay over 50% in total in taxes if you add em all up! (FICA, federal, state, Medicare, real estate, sales).
Quote: Joeman
I'm confused. Wouldn't itemizing still have been the way to go? Or did you not have as much in deductions this year?
Many itemized deductions that existed in 2017 do not exist anymore for tax year 2018. My personal situation didn't change, but I could itemize about $6000 less in 2018 than in 2017, so the standard deduction became the better option.
Quote: NathanMy IRS refund was my WORST Refund of all time. Only like $800! 😣 I usually get around $1,000! For Godsakes, I made more of a refund than that my first year working! First year working!
Well you are getting better.
You only let the government hold and use $800 of YOUR money all year long.
You should be wanting to owe a little every year. Not get a refund. Obviously you don't understand how income taxes and withholding work.
Quote: wellwellwellWell you are getting better.
You only let the government hold and use $800 of YOUR money all year long.
You should be wanting to owe a little every year. Not get a refund. Obviously you don't understand how income taxes and withholding work.
Not even just a little bit. To avoid penalty, you need to have paid 80% of your total amount due before you file. you could hold back almost 20% of your total tax burden if you were confident about where things would shake out.
Not to be impolitic, but a full time walgreens clerk should have almost no taxes due. earnings of $25k, minus $12k standard deduction, minus $9500 @ 0% = like $3k exposed to taxes at 12%. Total tax liability is under $400...
I didn't notice the tax cut having a noticeable effect on my paycheck. When did it go into effect, exactly? I can check my paystubs and see if there's any difference from one pay period to the next.
Quote: TigerWuRefund last year was much bigger than this year, but I think it might have more to do with my wife's self-employment changes than any supposed Trump shenanigans. I also pay extra every pay period. I'd rather temporarily give the government more money than necessary than find out I came up short and have a $2,000 tax bill due. Totally worth it from a psychological standpoint.
I didn't notice the tax cut having a noticeable effect on my paycheck. When did it go into effect, exactly? I can check my paystubs and see if there's any difference from one pay period to the next.
The changes hit at the first of the year. If you're like me, that makes the per-paycheck part hard to sort out. How much of the change is my tiny annual raise, how much is from resetting withholding to a baseline amount for the new tax year, how much is due to the tax table itself changing...
Quote: AZDuffmanI kind of like seeing the same people who claim they "didn't need a tax cut" under Bush scream when their taxes go up.
Sorry to hear yours went up, but the blue states need to start paying their fair share. CA especially.
Pffff. Sprinkling truth glitter on your lie like sawdust on vomit. :) What is California's "fair share"? California is a donor state. They have been every year people make this argument on here, never of course with anything to back it up.
And expect that donor status to jump "bigly," thanks to the cap on state and local taxes and other working person deductible losses.
rdw is the best example so far of the negative impacts a large percent of households will feel. He got screwed in 2 directions. 1st was losing the state/local tax deduct to its full extent AND other deductions, 2nd was losing exemptions. The 2nd child was the deal breaker, and all additional kids.
A family of 4 last year, not itemizing, got 12k in standard deduction credits, plus 4 exemptions, for 28k.
Those itemizing (above 12k) would have gotten more.
This year, that same family got 24k unless they could itemize above 24k. The exemptions got sort of rolled in, but not really.
SOOPOO is the runner-up on negative impacts, but filing single in a high-paying job (as opposed to rich and living off investments), he probably had the biggest dollar change. At least they told him that would happen.
Quote: rdw4potusThe changes hit at the first of the year. If you're like me, that makes the per-paycheck part hard to sort out. How much of the change is my tiny annual raise, how much is from resetting withholding to a baseline amount for the new tax year, how much is due to the tax table itself changing...
Okay, I just checked the first couple paychecks from 2018 and the last couple from 2017, and it's all over the map... haha... I get paid hourly, though, so that's probably why it's so hard to figure out. Whatever...
Quote: beachbumbabsPffff. Sprinkling truth glitter on your lie like sawdust on vomit. :) What is California's "fair share"? California is a donor state. They have been every year people make this argument on here, never of course with anything to back it up.
I can back it up. Of course, I know what I am talking about!
Top income tax rate in CA is 13.3%. This goes down to 1%. In my state (PA) it is a flat 3.07%. We will ignore local deductions and I will round off the .07% to work with even numbers. In CA you pay 4% at about $30,700. $22,000 is minimum wage in CA, so it is safe to assume most people will earn $30,000.
Lets assume a worker in PA and CA each earn $40,000 and itemized the local taxes. We will ignore if they should have taken the standard deduction for simplicity.
PA pays 3%, 40,000 * 3% = $1200. Leaving federal taxable income of $38,800.
CA pays 4%, $40,000 * 4% = $1600. Leaving federal taxable income of $38,400.
This is a $400 difference. Assuming a federal tax bracket of 15%m the person in PA sends in $400 * 15% = $60 more to the feds.
IOW, THE CA TAXPAYER IS NOT PAYING THEIR FAIR SHARE! In this case, $60.
It gets worse as the CA rates go past 10%, while the PA rate stays flat. That is at $1,000,000. The math is the same, though the high earners in CA are really stiffing the feds.
It is a simple thing. People in CA are sending money to Sacramento instead of the Feds. The rest of the nation is thus subsidizing CA's high tax rates.
Make sense now?
[balance snipped as I do not know the personal taxes of other forum members so cannot comment on what affects their taxes.]
Quote: mcallister3200Nathan moved from McDonald’s coffee to Starbucks, what a year.
Well, someone indirectly turned me on to Starbucks coffee kind of hard. ;)
Quote: AZDuffman
IOW, THE CA TAXPAYER IS NOT PAYING THEIR FAIR SHARE! In this case, $60.
So why are you getting mad at California? You should be getting mad at Pennsylvania for paying too much in taxes...!!
Quote: beachbumbabsPffff. Sprinkling truth glitter on your lie like sawdust on vomit. :) What is California's "fair share"? California is a donor state. They have been every year people make this argument on here, never of course with anything to back it up.
And expect that donor status to jump "bigly," thanks to the cap on state and local taxes and other working person deductible losses.
rdw is the best example so far of the negative impacts a large percent of households will feel. He got screwed in 2 directions. 1st was losing the state/local tax deduct to its full extent AND other deductions, 2nd was losing exemptions. The 2nd child was the deal breaker, and all additional kids.
A family of 4 last year, not itemizing, got 12k in standard deduction credits, plus 4 exemptions, for 28k.
Those itemizing (above 12k) would have gotten more.
This year, that same family got 24k unless they could itemize above 24k. The exemptions got sort of rolled in, but not really.
SOOPOO is the runner-up on negative impacts, but filing single in a high-paying job (as opposed to rich and living off investments), he probably had the biggest dollar change. At least they told him that would happen.
One part that you forgot to include in your calculations when you were comparing a family of four is the "Child Tax Credit and Credit for Other Dependents" These credits may make a substantial change to the amount a taxes owed.
https://www.irs.gov/credits-deductions/child-tax-credit-and-credit-for-other-dependents-at-a-glance
Quote:Child Tax Credit
Beginning with Tax Year 2018, you may able to claim the Child Tax Credit if you have a qualifying child under the age of 17 and meet other qualifications. The maximum amount per qualifying child is $2,000. Up to $1,400 of the credit can be refundable for each qualifying child as the Additional Child Tax Credit. A refundable tax credit may give you a refund even if you don’t owe any tax.
Credit for Other Dependents
Dependents who can’t be claimed for the Child Tax Credit may still qualify you for the Credit for Other Dependents. This is a non-refundable tax credit of up to $500 per qualifying person. The qualifying dependent must be a U.S. citizen, U.S. national, or U.S. resident alien.
Quote: TigerWuSo why are you getting mad at California? You should be getting mad at Pennsylvania for paying too much in taxes...!!
Numbers must not be your strong suit.
Quote: AZDuffmanNumbers must not be your strong suit.
Quote: beachbumbabs
SOOPOO is the runner-up on negative impacts, but filing single in a high-paying job (as opposed to rich and living off investments), he probably had the biggest dollar change. At least they told him that would happen.
Not sure I'm happy about my second place status in this contest.....
But people above my pay grade who are not specifically tied to a geographic location are leaving New York in droves. (Has anyone ever used the singular of 'droves'?)
It has always happened that people leave high income tax states like NY for low income tax states like Florida, but this new tax penalty was a game changer for many. It does not affect the poor and middle class, but the top earners, and thus top tax payers for your state, are leaving. In retirement I will probably be 7 months in Florida, 5 months in Buffalo...... (For me, not because of taxes, but good anyway....).
Andrew Cuomo specifically mentioned this phenomenon in his budget discussions.
Quote: FleaswatterQuote: beachbumbabsPffff. Sprinkling truth glitter on your lie like sawdust on vomit. :) What is California's "fair share"? California is a donor state. They have been every year people make this argument on here, never of course with anything to back it up.
And expect that donor status to jump "bigly," thanks to the cap on state and local taxes and other working person deductible losses.
rdw is the best example so far of the negative impacts a large percent of households will feel. He got screwed in 2 directions. 1st was losing the state/local tax deduct to its full extent AND other deductions, 2nd was losing exemptions. The 2nd child was the deal breaker, and all additional kids.
A family of 4 last year, not itemizing, got 12k in standard deduction credits, plus 4 exemptions, for 28k.
Those itemizing (above 12k) would have gotten more.
This year, that same family got 24k unless they could itemize above 24k. The exemptions got sort of rolled in, but not really.
SOOPOO is the runner-up on negative impacts, but filing single in a high-paying job (as opposed to rich and living off investments), he probably had the biggest dollar change. At least they told him that would happen.
One part that you forgot to include in your calculations when you were comparing a family of four is the "Child Tax Credit and Credit for Other Dependents" These credits may make a substantial change to the amount a taxes owed.
https://www.irs.gov/credits-deductions/child-tax-credit-and-credit-for-other-dependents-at-a-glance
Ok, so IF you fully qualify and ONLY have 2 kids and would have taken the standard deduction BOTH years, it's a wash. 3 kids, it's a loss of 2k. If you lost deductions with the doubled threshold, it's likely a loss. But in no case with kids is it a win.
Quote: beachbumbabs
Ok, so IF you fully qualify and ONLY have 2 kids and would have taken the standard deduction BOTH years, it's a wash. 3 kids, it's a loss of 2k. If you lost deductions with the doubled threshold, it's likely a loss. But in no case with kids is it a win.
In my case, the kids were net positive. Last year, the child tax credit of $1000 per child (x4 still at home) was phased out completely, but I did get a personal exemption for each. This year, I get the full $2000 per child because they raised the phase out limits.
Quote: AZDuffmanNumbers must not be your strong suit.
Or yours. You only did half of the required math. People in PA pay $60 more in federal tax than people in CA? OK. How much benefit from those dollars is received? PA get way more federal money on a per-capita basis. It's not close. And the net of money paid and money received is, of course, what actually matters. Also, that was very plainly Babs's point...
Quote: rdw4potusOr yours. You only did half of the required math. People in PA pay $60 more in federal tax than people in CA? OK. How much benefit from those dollars is received? PA get way more federal money on a per-capita basis. It's not close. And the net of money paid and money received is, of course, what actually matters. Also, that was very plainly Babs's point...
My point is solely on individual taxpayers and what they pay in. Bab's "point" is the same thing CA residents like to chirp about, even as they do not pay their fair share, as I showed. CA is in fact bleeding the rest of the nation in this regard.
All the federal money going to CA, it is not like they are not benefiting from federal spending. It will keep up with the high poverty rate in that state.
Bottom line, CA has not been paying their fair share. Now that they are all of the sudden they do not like high taxes.
Quote: AZDuffmanMy point is solely on individual taxpayers and what they pay in. Bab's "point" is the same thing CA residents like to chirp about, even as they do not pay their fair share, as I showed. CA is in fact bleeding the rest of the nation in this regard.
All the federal money going to CA, it is not like they are not benefiting from federal spending. It will keep up with the high poverty rate in that state.
Bottom line, CA has not been paying their fair share. Now that they are all of the sudden they do not like high taxes.
Yeah, that's a terrible argument to be making. really, really bad. Just silly. Let's put this in the context of another discussion on the board right now - WOV bill settling. You and I go to the Spring Fling. You order a T-Bone with oyster sliders and a bottle of wine. I order grilled chicken with a side salad and water. You pay $50. I pay $45. What you're saying in this tax conversation is that I'm somehow "bleeding" you because I paid less to cover our shared bill...
Quote: rdw4potusYeah, that's a terrible argument to be making. really, really bad. Just silly. Let's put this in the context of another discussion on the board right now - WOV bill settling. You and I go to the Spring Fling. You order a T-Bone with oyster sliders and a bottle of wine. I order grilled chicken with a side salad and water. You pay $50. I pay $45. What you're saying in this tax conversation is that I'm somehow "bleeding" you because I paid less to cover our shared bill...
No. I am making a perfect argument. Here is a better example. We still go to spring fling. Bill is divided equal. $50 each. You say you are only kicking in $40 because you split lunch for $10 each with someone earlier that day.
Quote: beachbumbabs
Ok, so IF you fully qualify and ONLY have 2 kids and would have taken the standard deduction BOTH years, it's a wash. 3 kids, it's a loss of 2k. If you lost deductions with the doubled threshold, it's likely a loss. But in no case with kids is it a win.
I am confused as to what you have based your information on. Let’s look at a typical US family. Since the US median income in 2018 was $61,371, for my calculations I will use the figure of $60,000.
I will also use the following information for a family filing a joint return;
-for 2017: standard deduction $12,700, each exemption $4,050 and child tax credit of $1,000 per child
-for 2018: standard deduction $24,000 and a child tax credit of $2,000 per child.
Family with 1 qualifying child
2017: $60,000 income, minus $12,700 standard deduction, minus $12,150 in exemptions, equals and adjusted gross income of $35,150. The 2017 tax on this amount was $4,336, subtract the child credit of $1,000 yields a tax obligation of $3,336
2018: $60,000 income, minus $24,000 standard deduction, equals an adjusted gross income of $36,000. The 2018 tax on this amount is $3,942, subtract the child credit of $2,000 yields a tax obligation of $1,942
So comparing a family with 1 child between the years 2017 and 2018, the tax obligation for year 2018 was $1,394 less.
If we do the same calculations for families with 2,3 and 4 children the figures are as follows:
-2 children: 2017 tax obligation $1,729, 2018 $58 ($1,671 less)
-3 children: 2017 tax obligation $120, 2018 a refund of $1,400 ($1,520 less)
-4 children: 2017 tax obligation $0, 2018 a refund of $1,400 ($1,400 less)
In 2018 the child tax credit became refundable, hence the reason for receiving a refund in my 2018 example for having 3 or more children.
Yes there may be the possibility of somewhat different figures in certain limited circumstances but for a “typical” family the figures do not lie.
Quote: AZDuffmanNo. I am making a perfect argument. Here is a better example. We still go to spring fling. Bill is divided equal. $50 each. You say you are only kicking in $40 because you split lunch for $10 each with someone earlier that day.
Yeah, no. It's like me deciding to order cheap things for dinner because I'd already had a big lunch & you still wanting to split the dinner bill equally as if there were any way that'd be fair. It isn't.
Quote: rdw4potusYeah, no. It's like me deciding to order cheap things for dinner because I'd already had a big lunch & you still wanting to split the dinner bill equally as if there were any way that'd be fair. It isn't.
You are still not getting it. What CA pays and what it "gets back" are two unrelated issues.
CA has not been paying their fair share. Given that liberals favor wealth redistribution this should not at all bother them. Now they are and all of the sudden they have a problem.
Tough for me to play though as I work for the feds, which, at least in my case, is a branch with a majority population of idiots, mental defectives, abject losers and that other word that triggers some folks. As such, my claim of "0" dependents was read as "6", and this is the first time in ~5yrs I've actually gotten a return (owed $3k last year, weee!). And as you can see by my years long failure to catch the mistake, I fit right in =p
Best I could do is way-back well into the Obama years, but that's a bit inaccurate as I'd have to subtract child tax credit as well as decipher what differences working for a non-state tax collection enterprise had. But as my last proper return was >$5,000 and with a complete non-understanding of anything to do with taxes, I do feel slighted working 60 more days a week than my last job but scoring a refund of only $1,100.
Render unto Caeser, I guess. I reckon all my unclaimed hustle evens things out (sorry Boz not sorry)
Quote: FaceI do feel slighted working 60 more days a week than my last job but scoring a refund of only $1,100.
I have had one refund in 15 years and it was only $1.
By not having the personal exemptions for a family of 4, I ended up paying about $ 1000 more.
I do like the concept of raising the married filing jointly standard deduction to 24K, which for many people, eliminates the hassle of itemizing deductions.
Quote: AZDuffmanQuote: beachbumbabsPffff. Sprinkling truth glitter on your lie like sawdust on vomit. :) What is California's "fair share"? California is a donor state. They have been every year people make this argument on here, never of course with anything to back it up.
I can back it up. Of course, I know what I am talking about!
Top income tax rate in CA is 13.3%. This goes down to 1%. In my state (PA) it is a flat 3.07%. We will ignore local deductions and I will round off the .07% to work with even numbers. In CA you pay 4% at about $30,700. $22,000 is minimum wage in CA, so it is safe to assume most people will earn $30,000.
Lets assume a worker in PA and CA each earn $40,000 and itemized the local taxes. We will ignore if they should have taken the standard deduction for simplicity.
PA pays 3%, 40,000 * 3% = $1200. Leaving federal taxable income of $38,800.
CA pays 4%, $40,000 * 4% = $1600. Leaving federal taxable income of $38,400.
This is a $400 difference. Assuming a federal tax bracket of 15%m the person in PA sends in $400 * 15% = $60 more to the feds.
IOW, THE CA TAXPAYER IS NOT PAYING THEIR FAIR SHARE! In this case, $60.
It gets worse as the CA rates go past 10%, while the PA rate stays flat. That is at $1,000,000. The math is the same, though the high earners in CA are really stiffing the feds.
It is a simple thing. People in CA are sending money to Sacramento instead of the Feds. The rest of the nation is thus subsidizing CA's high tax rates.
Make sense now?
[balance snipped as I do not know the personal taxes of other forum members so cannot comment on what affects their taxes.]
No. Doesn’t really make sense except as sophistry. State tax is a forced charitable contribution. Person in PA can choose to donate another $400 to charity of choice and pay same federal taxes as the CA person. Federal government isn’t robbed by either the voluntary $400 charitable donation by PA person or forced extra $400 charitable contribution of CA person.
