Are most of you seeing drastic changes in your tax refund this year?

[wbcincy]

Refund! Refund! Quote Paul Dooley Breaking Away 1979 . Seriously people base this on refund , look at total tax pd and it may have changed to paying more for some but not for most. I have never understood why so many people see a refund as free money. You let the Govt use your money and you dont get interest on it.

Well, here’s why. If I got $300 more a month, I’d probably just spend it stupidly without really noticing, and certainly not earn a dime of interest on it. However, if I get $3600 at the end of the year, we use that to book a little vacation, which I certainly notice.

So it is basically like free money, as long as you’re as dumb with your money as I am.

 

[bdgan]

Bullshit. Everyone should have some skin in the game.

A $50k exemption should be the least of your concerns. More than 20% pay NEGATIVE taxes.

 

[LionsandBear]

I couldn't itemize. I had on paper a $4000 loss on my rentals this year but couldn't use it. I did however get a refund instead of the usual $4500 bill to the IRS but that was of my own doing by making a few changes on how my paycheck was taxed.

 

[ILLINOISLION]

Make it 22% and the first $50k is tax free. The low income and poor don't pay anything. No other deductions, etc. But, it will never ever happen. The loss of jobs from accountants, lawyers, and the entire IRS would cause a huge unemployment problem. It really is unbelievable in how much we spend as a society on tax prep, avoidance, and enforcement. Like the War on Drugs, the War for Tax Simplicity can't, and won't be won. Too many people feeding from the trough for it to go away

A lot on tax prep and avoidance.....very little on enforcement.

 

[lein]

I think people in high property tax areas are going to feel significant pain -- their taxes go up significantly but worse, their houses are worth less. But I guess that was the intent -- punish NY and NJ for being blue

As opposed to making Federal taxpayers in other States subsidize high tax States.

 

[lein]

Also a good way to lower you salary and quality of life.

Salary so that you can rent a $2000 studio in the Bay Area?

 

[lein]

I really have a problem with them limiting the SALT deduction. The states who this hurts pay by far the largest percentage of federal income taxes already. And not only that, those states get LESS back than what they pay in.

For instance, California gets back less than a dollar for every dollar of Federal Taxes it pays. South Carolina gets back $7.87 for every federal tax dollar spent. New Jersey, Colorado, New York, Ohio, Mass and California are also states that already get less in return for every dollar spent. So what did we do? Punish those states even more. It isn't right.

I also heard the number of 600 billion being floated around for the Military budget. If not for the state listed above, how would it be possible to pay for that budget? It wouldn't be possible. The people who live there are there for one reason, that is where the jobs are. The taxes are high because population and density with some mismanagement thrown in.

But who has to pay higher taxes now? The state who already are paying for everyone else.

And not to mention, middle class isn't an even line. The salary to be middle class in NYC is much different than Johnstown PA or Alabama. The net effect is a big hit on middle class workers in those states.

If California decides to raise state taxes on an individual, why should taxpayers in Iowa pay it!

 

[roswelllion]

My biggest complaint is that our charitable contributions no longer benefit our return. I donate for other reasons, but I can see some people really reducing their charitable contributions because they will not get the tax benefit.

Well that must mean your state and local tax [capped at $10k] plus your mortgage interest, plus your charitable donations all added together was smaller than your new standard deduction. Think of it as they are giving you full credit for those deductions already. And thank you, i would prefer you give to charity rather than the govt.

 

[roswelllion]

It's only a punishment if you assume that the prior system was the fair baseline.

Stats do not support this thesis.

 

[roswelllion]

Mine was almost identical (rate went up 0.2% from last year).

And please, people, don't focus on the amount of your return. Ideally, you shouldn't be getting any return (or should owe a little). Otherwise, you are loaning the federal government money at 0% interest.

what state?

 

[roswelllion]

We always owe come tax season (married no kids, purchased a house in 2015). We purposefully don't withhold as much as we should for a few reasons. We live in CA and usually get a state refund which reduces ultimately financial hit on April 15th. This year was entirely different. We owed 150% more this year vs last year. I made a bit more ($10K) than last year but was the only change. Our only saving grace this year is that I purchased a Prius Prime so we have that one-time tax credit which reduces the hit a little bit. We're still paying 100% more than last year.

To account for this next year when we won't have the hybrid tax credit to soften the blow, we'll be changing our spending habits (less eating out, less shopping, and less travel). We're a drop in the bucket but if there are others like us choosing to do the same, that can't help the economy.

If the goal was to punish those in states like CA, NY, NJ, etc--mission accomplished.

And yes, we have a professional do our taxes.

I don't want to challenge you but unless i misunderstand your post I find it almost impossible to believe.
. Are you saying you paid 150% more this year than last year in total fed taxes or just you owe more at tax time than last year because of a change in withholding? If it is the former that just seems impossible.forgetting about the $10k more you earned that means if you had an effective rate of 15% in 17 it went up to 37% in 18. If you paid 8% in . 17 that means you paid 20% this year. If your SALT were so high and you couldn't deduct them all you almost certainly would have been subject to AMT which got favorable treatment this year.
If it was the latter that shouldn't change your lifestyle it only means you had more money each month in 18 that you didn't have in 2017.

 

[The Song Remains the Same]

My total required tax stayed about the same as 2017 even though my 23 year old college grad couldn’t be claimed this year. We filed jointly with no major changes to income or itemized deductions. The joint standardized deduction was much higher than our itemized amount mainly due to the cap limit to state income and property taxes.

My biggest problem was that I waited several months to change my W4 to 1 so about $3000 less was taken out which resulted in me having to owe about $1100.

Not sure if we are talking about the same thing, but you lose the ability to claim a college student as a dependent if they turn 24 (not 23) at any time during 2018. My son turned 24 on 12/31....

 

[The Song Remains the Same]

Under 30? And you post on this board? I thought you needed an AARP membership just to sign up.

Some of the board regulars. (I am not in the photo.)

.

Were you taking a nap and thus missed the photo op?

 

[roswelllion]

What you’re saying is that you added to the 2 trillion growth in the deficit.

Last i looked revenue was up this year. $2 trillion extra deficit is a spending not a revenue problem.

 

[roswelllion]

You must be in a very unusual tax situation for this to be true. Everyone I know is paying lower taxes in 2018. The standard deduction is up, the child tax credit is up, and tax rates are lower. Can you explain why your taxes went up so the rest of us can avoid your situation? The only explanation I can think of is that you have hundreds of thousands of dollars in income and you are in a high tax state (California, NY, etc.) and can't deduct all your state taxes.

And even then AMT should be a factor.

 

[roswelllion]

Listen, I was born in Johnstown, and lived in Ebensburg and Hollidaysburg when I was young. I remember the weather. man it was bad.
Then again, Brooklyn is only marginally better weatherwise. But lots more to do!

Well you pay a lot of state tax and probably a lot of local tax. That is part of the reason why Brooklyn is nicer than Ebensburg. State and local taxes should stand on their own. You get what you pay for. On the other hand whether you live in Brooklyn or Ebensburg you should pay the same federal taxes on the same income.

 

[roswelllion]

A $50k exemption should be the least of your concerns. More than 20% pay NEGATIVE taxes.

Hey bdgan,
Just wanted to say and i read this entire thread and as you see I chimed in quite a bit. Your posts were succinct right on point, and for anyone without a pre conceived bias who really wants to understand they should read them if they missed them the first time.

 

[SLUPSU]

Last i looked revenue was up this year. $2 trillion extra deficit is a spending not a revenue problem.

Revenue was up less than one half of one percent in FY 2018 or just $14B, at a minimum it should be up at least the rate of inflation and it should be up more when you consider increased gdp and job growth. For example, for FY's 11, 12, 13, 14, 15, the increases in revenue were 6.5, 6.4, 13, 8.9, and 7.6% respectively. For the second time in this thread I've had point out these facts because of the tired old "we have record revenues" or "revenue isn't the problem" talking points. The numbers for FY 18 would have been worse if the tax cut was in place the entire fiscal year.

https://www.whitehouse.gov/omb/historical-tables/

 

[roswelllion]

Revenue was up less than one half of one percent in FY 2018 or just $14B, at a minimum it should be up at least the rate of inflation and it should be up more when you consider increased gdp and job growth. For example, for FY's 11, 12, 13, 14, 15, the increases in revenue were 6.5, 6.4, 13, 8.9, and 7.6% respectively. For the second time in this thread I've had point out these facts because of the tired old "we have record revenues" or "revenue isn't the problem" talking points. The numbers for FY 18 would have been worse if the tax cut was in place the entire fiscal year.

https://www.whitehouse.gov/omb/historical-tables/

Well we can agree to disagree.
If in year 1 you collect $1,000 and spend $1,200 = $200 deficit
If in year 2 you collect $1,008 and spend $1,400 = $400 deficit

Most people would say the doubling of your deficit was due to spending not lack of or a drop in revenue.

 

[Frabjous]

As opposed to making Federal taxpayers in other States subsidize high tax States.

It’s the other side of the same coin, if that’s what you mean.

 

[GregPSU]

Here is an example of HRB....taxpayer makes under $20K per year. One W-2, child tax credit. Takes less than 15 minutes total. HRB charged $479 last year. It was highway robbery. The kicker...I did this as a favor to a client in 2016 and she never brought it back. I'm missing out on some easy money apparently but have to assume I will make it back somewhere else for doing the right thing.

I switched to private CPA from H&R due to that acct. leaving H&R and going on her own. Fee went from $220 to $75.
Also, how about this robbery from the Govt: My wife passed away in June. Her SS payment due two weeks(for May) later wasn't made. I had to go thru all the red tape to talk to someone who agreed the May pymt was due me. So they make the pymt but after taking out taxes & insurance they now consider that net pymt as a gross pymt to me and tax it again! I fought this for months both at nat'l and local level with no one changing it

 

[fairgambit]

Were you taking a nap and thus missed the photo op?

I was out chasing broads. My wife is OK with that because I never catch em'.

 

[NoVa Lion]

I’m not sure why tha5 is relevant...

It's the only thing that is relevant.

 

[bdgan]

Revenue was up less than one half of one percent in FY 2018 or just $14B, at a minimum it should be up at least the rate of inflation and it should be up more when you consider increased gdp and job growth. For example, for FY's 11, 12, 13, 14, 15, the increases in revenue were 6.5, 6.4, 13, 8.9, and 7.6% respectively. For the second time in this thread I've had point out these facts because of the tired old "we have record revenues" or "revenue isn't the problem" talking points. The numbers for FY 18 would have been worse if the tax cut was in place the entire fiscal year.

https://www.whitehouse.gov/omb/historical-tables/

Federal revenue was only up by $19B in 2016 vs 2015. It was only up $49b in 2017 vs 2016. My point is that it's unfair to say it would have been up by over $200b if not for the tax cuts. It's also dishonest when people complain that tax refunds are down while simultaneously complaining that tax revenues are down. That just shows political bias.

I believe the tax cuts had a negative impact on federal revenues. Probably somewhere around $60b. The actual number is impossible to prove because we don't know how much extra revenue was generated by the economic growth associated with the tax cuts.

 

[colt21]

Those millions of Americans are now getting the tax advantage. By raising the standard deduction to $24k those that give but don't have a total of $24K of personal exemptions plus taxes and charity giving are ahead.

So most of middle and lower income America IS getting a tax break. i.e. paying less taxes in 2018 than they did in 2017.

After reading some of the comments here I now see how so many people that really are benefiting by the new tax law are still managing to complain as if it has hurt them.....

Here is where it hurt them.
First off, the argument of "effective tax rate" is the most valid point made in this thread.
However, this biggest mistake in this thread is thinking the majority of people "understand" that. This board does NOT comprise a valid statistical sample of the people of this nation.

Many, many more people judge their taxes by their refund. When the tax cuts when into place, the White House also forced the IRS to change the Tax Tables (BEYOND what that actual tax cut was). Please don't think I'm making a political statement as I could care less, I'm just telling you what happened. The reason being, they wanted people to spend more money and spur the economy. I don't have a problem with that at all.

The problem I do have is that they wanted the average person to think that this tax cut was bigger than it was. So for example, if someone got an extra $50 in their take home pay, maybe $5 of that was the 'tax cut' and the remainder was due to the change in the tax table (don't overanalyze the math just making a point). Therefore, assuming 26 pays, an average person cut into their 'refund' by $1,170. For someone who is educated on how this works they would either adjust their w/h or calculate if they could withstand that much less of a refund. HOWEVER, for the average person who counted on that $2,000 refund as their one windfall per year that they could do something with, all of a sudden, their looking only a $830 refund. It does not matter that they actually paid less tax overall - it's say goodbye to that summer vacation or big purchase for them.

So again, my only problem with the whole thing is the smoke and mirrors with changing the tax tables and then acting like it was an accident - it was not.

Now I'm off to my tax-preparer job for the day.

 

[bdgan]

Well we can agree to disagree.
If in year 1 you collect $1,000 and spend $1,200 = $200 deficit
If in year 2 you collect $1,008 and spend $1,400 = $400 deficit

Most people would say the doubling of your deficit was due to spending not lack of or a drop in revenue.

The biggest contributors to the increase in the debt last year were entitlements and higher interest on the debt.

Higher spending on defense and other programs (in addition to lower tax revenues) also caused the defecit to increase.

 

[NittanyLionFan]

Given the change in tax brackets, it's hard to see how a loss of $10,000 in deductions would result in a sizeable increase in total income taxes.

Well, there is a raise in there and a sizable retention bonus, but I would have assumed that withholdings would have taken care of the extra income (family of 4 and I am claiming 4 on W4 and big withholding associated with the retention bonus). Wife's withholdings were lower, but her income wouldn't seemingly support such a big jump in tax liability (maybe need to investigate Married Filing Separately this year). Hopefully I can figure things out next weekend, to include detailed comparison to 2017 taxes. Maybe I am missing something, since the first draft was a bit of a rush job to include some 2018 details on a 2019 tuition application for one of my kids.

 

[psualt]

Here is where it hurt them.
Many, many more people judge their taxes by their refund. When the tax cuts when into place, the White House also forced the IRS to change the Tax Tables (BEYOND what that actual tax cut was). Please don't think I'm making a political statement as I could care less, I'm just telling you what happened. The reason being, they wanted people to spend more money and spur the economy. I don't have a problem with that at all.

I'm not sure where you came up with this. The tax tables work fine for most returns.

 

[GreggK]

If California decides to raise state taxes on an individual, why should taxpayers in Iowa pay it!

Because California already subsidizes Iowa. They take more than they pay in federal tax.

The question is why should New York, New Jersey and California subsidize Alabama, Arkansas, Mississippi and pretty much every other southern and Midwest state?

And why is it ok to further screw them

 

[4rosco]

Last i looked revenue was up this year. $2 trillion extra deficit is a spending not a revenue problem.

The $2 Trillion mentioned was not from 2018 but total under the Trump administration which includes a $565B deficit for FY17 which was an Obama administration budget.

 

[LemonEars]

If California decides to raise state taxes on an individual, why should taxpayers in Iowa pay it!

Very true. If the citizens of California, New York, Mass., etc. pay high state and local taxes then presumably they are receiving more services than those of us who pay low taxes. If the citizens of California want to pay lower federal taxes to offset their state and local taxes, then how about helping to pay the gigantic tuition costs for kids to go to college in relatively low taxed Pennsylvania?

 

[bdgan]

Well, there is a raise in there and a sizable retention bonus, but I would have assumed that withholdings would have taken care of the extra income (family of 4 and I am claiming 4 on W4 and big withholding associated with the retention bonus). Wife's withholdings were lower, but her income wouldn't seemingly support such a big jump in tax liability (maybe need to investigate Married Filing Separately this year). Hopefully I can figure things out next weekend, to include detailed comparison to 2017 taxes. Maybe I am missing something, since the first draft was a bit of a rush job to include some 2018 details on a 2019 tuition application for one of my kids.

Don't look at the refund. Look at the tax vs income for each year.

 

[GreggK]

Very true. If the citizens of California, New York, Mass., etc. pay high state and local taxes then presumably they are receiving more services than those of us who pay low taxes. If the citizens of California want to pay lower federal taxes to offset their state and local taxes, then how about helping to pay the gigantic tuition costs for kids to go to college in relatively low taxed Pennsylvania?

And yet those states get less federal money than the rest. NY, California and mass subsidize the low tax states already

 

[GreggK]

Don't look at the refund. Look at the tax vs income for each year.

I did. And I pay thousands more this year.

 

[NJPSU]

Because California already subsidizes Iowa. They take more than they pay in federal tax.

The question is why should New York, New Jersey and California subsidize Alabama, Arkansas, Mississippi and pretty much every other southern and Midwest state?

And why is it ok to further screw them

Bingo!

 

[BobPSU92]

You guys still file taxes? Suckers.

 

[bdgan]

I switched to private CPA from H&R due to that acct. leaving H&R and going on her own. Fee went from $220 to $75.
Also, how about this robbery from the Govt: My wife passed away in June. Her SS payment due two weeks(for May) later wasn't made. I had to go thru all the red tape to talk to someone who agreed the May pymt was due me. So they make the pymt but after taking out taxes & insurance they now consider that net pymt as a gross pymt to me and tax it again! I fought this for months both at nat'l and local level with no one changing it

You always include the gross amount of SS payments on page 1 of form 1040. Most people are taxed on 85% of that amount. Low incomes don't pay tax on any of it.

 

[LemonEars]

I did. And I pay thousands more this year.

Can you enlighten he rest of us and explain why you paid thousands more in taxes this year? The only reason I can think of is that you live in a high tax state and had a huge amount of income.

 

[LemonEars]

Because California already subsidizes Iowa. They take more than they pay in federal tax.

The question is why should New York, New Jersey and California subsidize Alabama, Arkansas, Mississippi and pretty much every other southern and Midwest state?

And why is it ok to further screw them

Most of the federal payments to states is in Social Security and Medicare money. (see link) Given that, I don't see how you can argue that California subsidizes Iowa. Iowa isn't being given preferential treatment on spending. It is simply that more SS and Medicare recipients per capita live in Iowa than California.

 

[TheBigUglies]

I made one pass of my returns and I owe when I normally get $$ back. I usually plan it so that I get at least a little back, less then $1000. However, I owe $2500 this year because the personal exemptions went away for my 5 person family. My itemizations are usually less then the $24K standard deduction which should have made it a little better. We claim 0 on our W4s and still owe which sort of pisses me off that I now have to make additional withholdings. The other thing that caught me by surprise is the max $10K on other taxes which I thought was just property which would have been fine for me but it includes the state and local income taxes which is over $10K for me. However, this was my initial pass a couple weeks ago and I may have missed something.