OT: Tax Refunds

[scott in nashville]

I got hit by the loss of key itemized deductions.

The Republican Congress and President raised my taxes a couple grand.

I'll survive.

What ticks me off is that those deductions that used to go to middle class folks like myself were pulled to pay for changes that help rich folks and trust fund babies like getting rid of the estate tax.

But it will trickle down. Or so I'm told...

This is what will hurt me the most, loss of deductions. I had a good year last year, but expect to owe a lot with the changes.

For some reason my employer cannot seem to figure out how to adjust what comes out of bigger commission checks, so I run this risk every year.

 

[Big Don]

Refund difference only matters if everything else is the same as lat year. Was your amount withheld was the exact same?.Was the total amount of taxes due for the year vs last year the same? Was your income the exact same?

 

[IcelandTiger]

Trump could’ve changed to a flat tax of 10% and there would be people in here complaining that they lost their deductions

 

[TimmyBobby_rivals]

Did your income go up too? If not, what’s driving the increase?

My income went up a tax bracket federally. That is really all that changed

 

[TigerOnTheRidge]

I have not completed my return yet as I am still waiting on some more info, but a preliminary estimate has mine and my wife’s AGI up $7k over 2017 but our effective tax rate down 1.7%. We itemize and became eligible for the $2k per child tax credit, which we were not eligible for last year.

What deductions went away for some of you that affected your effective tax rate negatively in the end? IPTAY?

 

[scotchtiger]

My income went up a tax bracket federally. That is really all that changed

So increased income drove the reduced refund, not tax reform.

 

[IcelandTiger]

I have not completed my return yet as I am still waiting on some more info, but a preliminary estimate has mine and my wife’s AGI up $7k over 2017 but our effective tax rate down 1.7%. We itemize and became eligible for the $2k per child tax credit, which we were not eligible for last year.

What deductions went away for some of you that affected your effective tax rate negatively in the end? IPTAY?

I don’t think they understand the term effective tax rate

 

[diehardtiger1989]

Refunds are for chumps.

 

[ArmyTiger27]

I feel like this has been discussed somewhere before.

Paging @1Clemzunfan and @FLaw47. They can edumucate some folks on the topic.

 

[ArmyTiger27]

I have not completed my return yet as I am still waiting on some more info, but a preliminary estimate has mine and my wife’s AGI up $7k over 2017 but our effective tax rate down 1.7%. We itemize and became eligible for the $2k per child tax credit, which we were not eligible for last year.

What deductions went away for some of you that affected your effective tax rate negatively in the end? IPTAY?

In my case, if you have job expenses that exceed the deduction, you’re screwed.

Specifically, you can no longer claim mileage beyond the standard deduction.

In before some millionaire tries to explain its a ‘great deal’ for all.

 

[IcelandTiger]

This calculator was interesting

https://www.washingtonpost.com/graphics/2017/business/tax-bill-calculator/?utm_term=.26a49c4d6b9a

 

[tigfan92]

This. If you paid less during the year but got a smaller return, you very well could have come out ahead. There is a small percentage of people that might see an unintended adverse impact, but that will be rare. I’m expecting a significant improvement in effective tax rate and I’m squarely in the “I pay more than my fair share” category.

This. Even though I was down on my return, overall, I was up.

 

[ScubbaS]

My effective tax rate went down 2% to 17%

 

[scott in nashville]

Trump could’ve changed to a flat tax of 10% and there would be people in here complaining that they lost their deductions

I’d love that

 

[mind-mend]

This is what will hurt me the most, loss of deductions. I had a good year last year, but expect to owe a lot with the changes.

For some reason my employer cannot seem to figure out how to adjust what comes out of bigger commission checks, so I run this risk every year.

All my sales reps are 100% commission. I’ve seen one ask my CFO to report 40 dependents on a large commission check. It’s harder for them to know what their tax rate will be due to the commission structure.

Also, Why is it so hard for people to understand tax rate vs. tax refund? If you are bringing home more money each paycheck but get a lower refund Who gives a ****? It’s all about net dollars in your pocket each year.

 

[TimmyBobby_rivals]

So increased income drove the reduced refund, not tax reform.

Eh it still sucks bc I pay more in than most. Progressive

 

[scott in nashville]

All my sales reps are 100% commission. I’ve seen one ask my CFO to report 40 dependents on a large commission check. It’s harder for them to know what their tax rate will be due to the commission structure.

Also, Why is it so hard for people to understand tax rate vs. tax refund? If you are bringing home more money each paycheck but get a lower refund Who gives a ****? It’s all about net dollars in your pocket each year.

Seems that 40 dependents would net you less tax? I find they generally don’t take enough out and I owe a lot at the end of the year. I claim single zero every year and still get clobbered. Losing a lot of deductions this year would make it worse.

 

[JAMCRACKER99]

Yeah, because that's what the internet specialises in...intelligent people who can think logically.

Obama could have taxed income at 100%, but given everyone a 50% refund, and "most people" would have been thrilled. Trump could have cut taxes to 0%, which would have eliminated refunds, and "most people" would hate him for it.

LMFAO ... not on this board!

 

[jonalexand1]

I’m curious for sure. My salary didn’t change from previous year and I haven’t noticed a difference in my direct deposit take home amounts. So we’ll see about the tax outcome when we do those soon.

 

[ctgrs74]

For those that have filed, how are you doing on your returns this year? I haven’t filed yet, but just about everyone I have asked says it went down or significantly down. A few have said they owe for the first time in their life. Yikes!

https://www.politico.com/story/2019/02/08/average-tax-refund-down-1158440

Not surprised. When you get more in your salary due to tax bill, it would cause less in your refund. In some cases, you might even owe if you didn’t change your exemptions.

The bill was never about the little man. Corporations and the rich is who it was designed for. Trump and his cronies don’t give a happy go lucky damn about middle income Americans.

 

[yeti24]

That was part of the idea behind the SALT cap. The theory was that high tax states were being partially funded through federal tax deductions.

Yeah I got that for sure. That was an unsustainable and unfair “business model” for those states (CA, NY, CT, NJ, NY, IL in particular). Just the other day the NY guv held a presser indicating this exodus of wealthy to lower tax states blew a $2.8Bn hole in the states already lowered revenue expectations. That will be a fascinating dynamic over the coming years.

 

[pickenstiger]

For those that have filed, how are you doing on your returns this year? I haven’t filed yet, but just about everyone I have asked says it went down or significantly down. A few have said they owe for the first time in their life. Yikes!

https://www.politico.com/story/2019/02/08/average-tax-refund-down-1158440

My refund basically was reduced my IPTAY giving. In other words what I gave to IPTAY reduced my refund by that much because I was able itemize my deductiona instead of taking standard deduction

 

[Panama City Tiger]

Refunds are for chumps.

Refunds are for poors.

Don’t be a poor.

 

[whitesixmile]

Refunds are for poors.

Don’t be a poor.

This is such a condescending statement. I understand the point but most would rather get money back rather than pay in no matter if you are rich or poor.

 

[Klemnop]

rethinking getting involved in this. Response deleted.

Also, i’m Not a poor

 

[mind-mend]

Seems that 40 dependents would net you less tax? I find they generally don’t take enough out and I owe a lot at the end of the year. I claim single zero every year and still get clobbered. Losing a lot of deductions this year would make it worse.

Yes. Less tax. They change dependants monthly depending on their cash needs that month. But they pay for it come tax time.

 

[Klemnop]

Seems that 40 dependents would net you less tax? I find they generally don’t take enough out and I owe a lot at the end of the year. I claim single zero every year and still get clobbered. Losing a lot of deductions this year would make it worse.

C’mon, man, if you’re making that kind of income year over year it’s time to get an Accountant. The investment in a professional will pay for itself 5x, if not more. (And is tax deductible).

1) Your accountant can advise you the proper amount to have in additional withholding if you are determined to get to 12/31 close to even.

2) There are likely things you can be doing to improve your general situation.

At a minimum you can update your W-4 during the bonus/commission payment period(s) to take additional withholding. No person (W-2) can control the minimum amount of tax withheld. But every person can control the maximum. If you want more withheld the gov’t will be happy to take that extra contribution from you. Then toggle your W-4 back to “normal” for non-bonus/commission pay periods.

Bonus/commission amounts are taxed separately at a flat rate independent of your regular wages. It sounds like in your situation the flat rate doesn’t account for enough withholding.

 

[IcelandTiger]

This is such a condescending statement. I understand the point but most would rather get money back rather than pay in no matter if you are rich or poor.

I disagree, you shouldnt want a refund or want to pay either (smart people rich or poor).

I guess people without self control would want a refund

 

[other1]

Refunds are for poors.

Don’t be a poor.

Please share with the great unwashed what it is like to be an elitist..

 

[padtigers]

All my sales reps are 100% commission. I’ve seen one ask my CFO to report 40 dependents on a large commission check. It’s harder for them to know what their tax rate will be due to the commission structure.

Also, Why is it so hard for people to understand tax rate vs. tax refund? If you are bringing home more money each paycheck but get a lower refund Who gives a ****? It’s all about net dollars in your pocket each year.

Becasue some people "need" that refund. They do not realize that you make the difference back per paycheck. I know people that will run up a credit card then pay it off with their refund check. I tell them "You lost money because you are paying interest on that credit card". They cannot understand the end result. My bills are due every 12 months. If I get a smaller return but more per pay period I am up in the end.

 

[BC1973]

Refund difference only matters if everything else is the same as lat year. Was your amount withheld was the exact same?.Was the total amount of taxes due for the year vs last year the same? Was your income the exact same?

My income was about 2000 more than last tax year. Same tax bracket. Same tax deduction rate. Getting back more this year. I claimed standard deduction (married/joint/no dependents) both years. So there's that.

 

[Panama City Tiger]

Refunds are for poors.

Please share with the great unwashed what it is like to be an elitist..

I usually get a small refund back every year...I’m a poor.

 

[3BikeChariot]

Taking away the home office, mileage, and meals write off for a W-2 sales person was killer.

I thought the standard deduction doubled, so the items you listed are still deductible, but only relevant if the sum of itemized deductions is greater than the standard deduction.

 

[OrangeTigerTower2]

I thought the standard deduction doubled, so the items you listed are still deductible, but only relevant if the sum of itemized deductions is greater than the standard deduction.

No they eliminated those deductions entirely. Unless you qualify by being a government employee...

 

[MacAttackTiger]

I’ll say it, Maga folks sounding real sensitive about this post. Could they just now be realizing the tax cut hoax ?

 

[IcelandTiger]

I’ll say it, Maga folks sounding real sensitive about this post. Could they just now be realizing the tax cut hoax ?

What is the “tax cut hoax”?

 

[MacAttackTiger]

I’ll say it, Maga folks sounding real sensitive about this post. Could they just now be realizing the tax cut hoax ?

What is the “tax cut hoax”?

I should’ve said “middle class tax cut hoax”. It was a great corporate tax cut.

 

[scotchtiger]

I should’ve said “middle class tax cut hoax”. It was a great corporate tax cut.

I’m not a corporation and it’s great for me too.

 

[IcelandTiger]

I should’ve said “middle class tax cut hoax”. It was a great corporate tax cut.

Just trying to understand. Are you saying the majority of the middle class will pay a higher effective tax percentage this year compared to the last few years?

 

[MacAttackTiger]

I should’ve said “middle class tax cut hoax”. It was a great corporate tax cut.

Just trying to understand. Are you saying the majority of the middle class will pay a higher effective tax percentage this year compared to the last few years?

I’m saying people got peanuts on the front end to provide cover for what was really a corporate tax cut. And they sound like they are finding out that they are paying for it on the back end. Time will tell if that’s the case. Seems like we blew up the deficit for Corp stock buy backs.