Fergasun Posted April 15, 2019 Share Posted April 15, 2019 Just did my taxes (used FreeTaxUSA, Federal is free and state charges $15 to file -- CA has free file, but my situation is more complex) and like most others my deductions/exemptions was hit by a $10k number (which means that $10k is now subject to my income tax rate!). We bought a home in April of 2017 and when I revised our taxes, I was amazed at how well we did. I would have made out even more this year than last because I owned a home the whole year and paid "early year interest" on it. I was still slightly over the standard deduction due to charitable giving. My tax situation changed a bit for other reasons, but without those changes it amounted to a $4 to 5k difference in Federal Taxes. It was obvious they were screwing people with the deduction/exemption/child credit "3 card monte". Happy that overall I still didn't owe... but when I look over at the corporations that made bank this year, I'm pretty red. Link to comment Share on other sites More sharing options...
Elessar78 Posted April 15, 2019 Share Posted April 15, 2019 https://www.nytimes.com/2019/04/14/business/economy/income-tax-cut.html?action=click&module=Top Stories&pgtype=Homepage 1 Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 Made significantly more money than the previous year no house for any part of 2018 (rented while building) paid significantly less taxes (not even talking my percentages yet, just outright paid less despite making significantly more) We hit SALT without even owning a house during the tax year. I dont know if I’ll be able to do an itemized deduction next year. We’ll see. Effective tax for 2017 - 19% Effective tax for 2018 - 14.5% theres no question the bill was good for me this year. We’ll see how it changes next year. Biggest thing that helped was the child credit. They either raised the limit for claiming it or it’s new, can’t remember. That 4K credit is what sent us from owing a little to getting a bunch back. Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 35 minutes ago, Elessar78 said: https://www.nytimes.com/2019/04/14/business/economy/income-tax-cut.html?action=click&module=Top Stories&pgtype=Homepage People think their refund is their taxes. Hell some people “rely” on their refund for things. Can you imagine? Basically were a country full of financially inept people that don’t understand the basics of how their government works or functions. 2 Link to comment Share on other sites More sharing options...
LD0506 Posted April 15, 2019 Share Posted April 15, 2019 1 Link to comment Share on other sites More sharing options...
Elessar78 Posted April 15, 2019 Share Posted April 15, 2019 8 minutes ago, tshile said: People think their refund is their taxes. Hell some people “rely” on their refund for things. Can you imagine? Basically were a country full of financially inept people that don’t understand the basics of how their government works or functions. I've lived the life of zero refund (have owed small or received a small refund in the past). Definitely didn't like it as much as getting a bigger refund. While we don't "rely" on it, it is included in our financial planning. We put money into our 401(k)s to the max match, we save short term funds, we put money in 529 plans, and we live off a budget. We never used to use credit cards and built a ridiculous credit score, but now we are more amenable to using them. I actually like the effect of forced savings. Yeah, I could in theory do that on my own but I've been less than happy with the results. As you can hopefully see, we exhibit a modicum of financial discipline. But to your first point, I don't confuse the two: my refund isn't my overall tax burden. To your second point, I agree: mostly financially inept people who don't understand how gov't works/functions. Which is why I don't understand this tax bill. Taxes are income for the gov't. Logically, when you reduce income you make a matching reduction in spending—which hasn't happened. In fact, most of the proposals on the table look to increase spending. Further, the President and Senate's Controlling party (Republicans) have painted themselves as the anti-deficit and spending reduction party. But in practice they are not doing that, but the opposite. The theory seems to be that tax reduction will spur investment (in those that have surplus funds to invest) which will grow the economy in a way that will offset the increase to the deficit. That's kind of a big gamble since that hasn't been shown to work in real life. Maybe it has. Enlighten me. Link to comment Share on other sites More sharing options...
The Evil Genius Posted April 15, 2019 Share Posted April 15, 2019 (edited) Our AGI actually went up about 5k this year, but our taxable income went up 24k. So yeah, we paid a lot more in taxes even at the lower tax rate. Why? That $8100 in personal exemptions for joint filing disappearing this year. Also already mentioned a billion times, more than 10k+ SALT deductions that was lost. This (increase in taxable income) is even with us increasing our charitable contributions from last year. Edit..I consider myself extremely lucky since what we owed to the Feds was almost offset by what the State owed us. But I have a lot of friends here that see looking at 3-4k fed tax bills to the when previously they had gotten a small to medium refund back. Poor planning? Yeah maybe. Doesn't make it easier for them when they have to write a check for money they don't have (especially if they didn't see a noticeable raise in their paycheck) in 2018. Edited April 15, 2019 by The Evil Genius 1 Link to comment Share on other sites More sharing options...
Elessar78 Posted April 15, 2019 Share Posted April 15, 2019 25 minutes ago, The Evil Genius said: Edit..I consider myself extremely lucky since what we owed to the Feds was almost offset by what the State owed us. But I have a lot of friends here that see looking at 3-4k fed tax bills to the when previously they had gotten a small to medium refund back. Poor planning? Yeah maybe. Doesn't make it easier for them when they have to write a check for money they don't have (especially if they didn't see a noticeable raise in their paycheck) in 2018. I think the gov't owed it to people to make a bigger deal to adjust their W2. I think there was a little push, but not enough. I'm not against personal responsibility, but there were a lot of people whose workplaces didn't even inform them that the game had changed. I think this whole tax bill was/is pretty punitive to areas that were not pro-Trump in the election. But I don't have hard data to back that up. Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 24 minutes ago, Elessar78 said: To your second point, I agree: mostly financially inept people who don't understand how gov't works/functions. Which is why I don't understand this tax bill. Taxes are income for the gov't. Logically, when you reduce income you make a matching reduction in spending—which hasn't happened. In fact, most of the proposals on the table look to increase spending. Further, the President and Senate's Controlling party (Republicans) have painted themselves as the anti-deficit and spending reduction party. But in practice they are not doing that, but the opposite. Dont mix personal finances with government finances unless you have a multi-trillion dollar economy to leverage you don’t play by the same rules. The whole “less revenue” thing seemed to have been a q1 issue. Reports I’m seeing is tax revue is up with the new bill. I still dont think the bill is good. If I were in charge of writing one this isn’t what I would do. But there’s been a ton of misinformation about it. Apparently it didn’t do terrible on the revenue side of things. Mostly because it was bailed out from taxes generated on certain types of transactions and business both of which increased and there was just a lag to see it. In a day where most people only care about themselves and neither party seems to care about appealing to me I’ll happily take a 40k increase in earnings with a 3k decrease is tax liability. If everyone’s going to be a jerk I might as well get more money out of it. Link to comment Share on other sites More sharing options...
HOF44 Posted April 15, 2019 Share Posted April 15, 2019 (edited) 3 hours ago, tshile said: Made significantly more money than the previous year no house for any part of 2018 (rented while building) paid significantly less taxes (not even talking my percentages yet, just outright paid less despite making significantly more) We hit SALT without even owning a house during the tax year. See the killer was having the house and all the salt deductions and the personal exemptions reduced hugely. You didn't have all of them so didn't lose them. Plus you added child care credits that weren't there last year. If you had been in your house all last year and then filed the same this year I'm not sure you would have been thrilled. You just had a unique circumstance that hit the sweet spots of this tax plan. I'm still pissed!! lol (not at you, ****ing trump!) Edited April 15, 2019 by HOF44 Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 (edited) 33 minutes ago, HOF44 said: See the killer was having the house and all the salt deductions and the personal exemptions reduced hugely. You didn't have all of them so didn't lose them. Plus you added child care credits that weren't there last year. If you had been in your house all last year and then filed the same this year I'm not sure you would have been thrilled. You just had a unique circumstance that hit the sweet spots of this tax plan. I'm still pissed!! lol (not at you, ****ing trump!) I used to have those, so i have something to compare them to. Without those deductions now (which I had before), we're making significantly more money and paying significantly less in taxes (as a raw figure, and a percentage. I literally paid less in taxes this year than I paid last year and I made 25% more money this year than last) If I get to itemize and my house is enough to deduce I will pay even less in taxes now. Both scenarios are less than what I was paying before. Both as raw figures and as effective tax rate. I lost 5% of my effective tax rate and I took a standard deduction instead of itemizing all my stuff like I used to. I definitely pay less under this tax plan that I used to. Significantly less by my standards. Not sure what happens when ours expires in 6 years. Edited April 15, 2019 by tshile Link to comment Share on other sites More sharing options...
twa Posted April 15, 2019 Share Posted April 15, 2019 a large part of it is designed to get businesses to invest in new equipment and expansion, and help startups. which stimulates the economy and tax base 1 Link to comment Share on other sites More sharing options...
Fergasun Posted April 15, 2019 Share Posted April 15, 2019 @Elessar I disagree with the premise in those NYT charts. They failed to take into account that your "AGI" in 2017 is completely different than "AGI" in 2018. Of course someone with AGI $50k 2017 and AGI $50k 2018.... AGI $50k 2018 will pay less. However, no wage increase family that loses exemptions AGI $50k 2017 will be taxed at AGI $65k 2018. It's not apples to apples. It feels like even the talking points are a scam. 2 Link to comment Share on other sites More sharing options...
@DCGoldPants Posted April 15, 2019 Share Posted April 15, 2019 Regardless. The only response to people who are upset that they say their taxes were higher and/or their returns weaker is to say they're wrong. Even better if you call them stupid. Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 15 minutes ago, @SkinsGoldPants said: Regardless. The only response to people who are upset that they say their taxes were higher and/or their returns weaker is to say they're wrong. Even better if you call them stupid. Depends. Are they saying their taxes are higher because their refund is less? Or are they saying their taxes are higher because their taxes are actually higher? Link to comment Share on other sites More sharing options...
@DCGoldPants Posted April 15, 2019 Share Posted April 15, 2019 Just now, tshile said: Depends. Are they saying their taxes are higher because their refund is less? Or are they saying their taxes are higher because their taxes are actually higher? Some are saying one, and some are saying the other. Self Employed here. I got a return. Wasn't expecting a little more. But paying estimated throughout the year usually makes it easier to do the math as I go. A lot of my small business write-offs were gone though. That was very surprising. Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 (edited) 6 minutes ago, @SkinsGoldPants said: Some are saying one, and some are saying the other. So some are stupid and some are not. In reality, you either understand your taxes or you don't. I think what you're seeing is a lot of people who don't understand their taxes (despite their taxes being pretty simple in the grand scheme of things) talking a whole lot about their opinions on taxes. Some of them are getting called on it. If the person can't tell you what their effective tax rate is they're not capable of telling you whether they paid more or less in taxes. They don't know enough about their own tax situation. Effective tax rate is literally how you measure what you pay in taxes, so if you don't know it then how can you speak to whether you're better/worse off? I guess you could measure it in raw $ but you'd have to provide a whole lot of context for it to make sense. Usually you see people use raw numbers when it allows them to tell a story a normalized number doesn't, and then they provide no context to allow you to determine what exactly they're talking about; ie: they lie. edit: in my circle of friends no one seems to know their effective tax rate (I don't think a single one of them has heard of it), and everyone ties "my taxes" to "my refund". So, unsurprisingly, they're all complaining about a bunch of stuff. None of them know anything about any of it, but that's not stopping them from complaining. Edited April 15, 2019 by tshile Link to comment Share on other sites More sharing options...
@DCGoldPants Posted April 15, 2019 Share Posted April 15, 2019 Just now, tshile said: So some are stupid and some are not. In reality, you either understand your taxes or you don't. I think what you're seeing is a lot of people who don't understand their taxes (despite their taxes being pretty simple in the grand scheme of things) talking a whole lot about their opinions on taxes. Some of them are getting called on it. Like I said earlier, if the person can't tell you what their effective tax rate is they're not capable of telling you whether they paid more or less in taxes. They don't know enough about their own tax situation. Effective tax rate is literally how you measure what you pay in taxes, so if you don't know it then how can you speak to whether you're better/worse off? I guess you could measure it in raw $ but you'd have to provide a whole lot of context for it to make sense. Usually you see people use raw numbers when it allows them to tell a story a normalized number doesn't; ie: lie. Fair enough. Probably won't work as well in the echo chambers that many people are in. People were told they were going to have these amazing beautiful lower taxes and for whatever reason they hear now. It doesn't feel like it anymore in the grand scheme of things. Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 Just now, @SkinsGoldPants said: Fair enough. Probably won't work as well in the echo chambers that many people are in. People were told they were going to have these amazing beautiful lower taxes and for whatever reason they hear now. It doesn't feel like it anymore in the grand scheme of things. I made 40k more and paid 3k less. I went from itemizing ~40k in deductions to taking a standard deduction of 24k. My effective tax rate went from 19.x% to 14.x%. I paid 5% lower effective tax rate. I had amazing beautiful lower taxes. It's great, for me. Not so sure about the country. But I got what I was promised. It seems like most of the people complaining don't know what they're complaining about. That chart is effectively describing the situation - people don't understand their taxes. And for most people, their taxes are pretty simple. Link to comment Share on other sites More sharing options...
The Evil Genius Posted April 15, 2019 Share Posted April 15, 2019 (edited) Can we at least agree that getting rid of the personal exemption basically eliminated the majority of the increase in the standard deduction? And that if you still itemize that the changes are even more punitive? And that there are people out there who fall in the realm of paying more this year because of an increase in taxable income that came from capping the SALT and getting rid of the personal exemption? Edited April 15, 2019 by The Evil Genius Link to comment Share on other sites More sharing options...
tshile Posted April 15, 2019 Share Posted April 15, 2019 1 minute ago, The Evil Genius said: Can we at least agree that getting rid of the personal exemption basically eliminared the majority of the increase in the standard deduction? And that I'd you itemize that was even more punitive? And that there are people out there who fall in the realm of paying more this year because of an increase in taxable income that came from capping the SALT and getting rid of the personal exemption? No - I thought it did but it clearly didn't for me. No. Same rason. Yes. I sure that exists. I'm not sure who they are because I thought I'd be one of them and I wasn't. Link to comment Share on other sites More sharing options...
Springfield Posted April 15, 2019 Share Posted April 15, 2019 I was expecting more and got less. Our household income went up by $5k and our tax owed went up by $4k. Our taxable income shot up by $30k. I feel raped by republicans. PS: That extra $50 per paycheck made no discernible difference in my life. In fact, I didn’t even realize that it was there all year. That’s how much I think the of the chump change that they tossed me every two weeks. Bunch of ****ing crooks won’t ever get my vote again. Link to comment Share on other sites More sharing options...
The Evil Genius Posted April 15, 2019 Share Posted April 15, 2019 1 minute ago, Springfield said: I was expecting more and got less. Our household income went up by $5k and our tax owed went up by $4k. Our taxable income shot up by $30k. Almost the same as us. AGI went up 5k but taxable income went up 24k (would have worse if we had stayed at the same level of commitment to charitable contributions as 2017). Turned a fat refund last year (which was a mistake) to owing a little over 1k this year. Link to comment Share on other sites More sharing options...
Elessar78 Posted April 15, 2019 Share Posted April 15, 2019 6 minutes ago, Springfield said: That’s how much I think the of the Trump change that they tossed me every two weeks. Let's brand it, for what it is. Link to comment Share on other sites More sharing options...
Elessar78 Posted April 15, 2019 Share Posted April 15, 2019 Read in NYT that the tax tables for W4 witholding were only in effect for 9 months last year. Make sure to review witholding for 2019 to make sure there are no surprises. Let me know if this jives with what some of you may know. Link to comment Share on other sites More sharing options...
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