Tax Bill

[The Evil Genius]

This will likely be the first year in a decade plus that the standard deduction will be higher than our itemized one. It wouldn't be if the GOP hadn't limited SALT deductions to 10k..but I digress.

 

 

[China]

The IRS has already issued nearly $16 billion in tax refunds, but your refund may be smaller than last year's

 

Tax filing and refund season appears to be coming early for many U.S. residents this year.

 

According to the latest data from the Internal Revenue Service, the total number of refunds sent to people who filed their taxes through the week ending Feb. 3 has nearly doubled from last year's total through the same week: from about 4.3 million to nearly 8 million.

 

As a result, the total amount of money refunded at this point in the calendar has gone up by about two-thirds, from $9.5 billion last year to nearly $16 billion this year.

 

However, the average refund amount has shrunk because various pandemic-era stimulus programs have expired for some taxpayers, like the child tax credits and earned income tax credits that were temporarily expanded at the height of the pandemic. At the moment, the average tax refund amount stands at $1,963, compared with $2,201 this same time last year. The IRS previously warned about this occurrence in December.

 

Click on the link for the full article

[The Evil Genius]

Imo if you are getting a refund, you're doing something wrong (on your withholdings). 

[tshile]

On 2/9/2023 at 1:49 PM, The Evil Genius said:

This will likely be the first year in a decade plus that the standard deduction will be higher than our itemized one. It wouldn't be if the GOP hadn't limited SALT deductions to 10k..but I digress.

 

 

That was us last year. 
 

our effective tax rate was basically the same as previous years though. So just because you’re on the standard deduction doesn’t mean you’ve lost money…

 

this year however there’s lots of things that expired or my household no longer qualifies for. Combined with what I believe was a mistake I made on my w4 when switching jobs, my current tax bill is 12k

 

still have to double check things.

[The Evil Genius]

The SALT 10k cap that Trump enacted definitely means we lost money, even with the higher standard deductions. 

[LadySkinsFan]

Here's what's ****ed up about the tax system for those of us on Social Security: they lump back into your 1099-social security the money they take out monthly for Medicare Part B contributions. So we never see that money, it's what we are charged monthly for Medicare Part B, yet it's part of our total Social Security income. Thankfully I think the increased standard deduction will be enough so I don't have to pay any taxes and Texas doesn't charge personal income tax for seniors. I haven't done my forms yet so I'll see when I do.

[tshile]

3 hours ago, The Evil Genius said:

The SALT 10k cap that Trump enacted definitely means we lost money, even with the higher standard deductions. 

 

Well, that’s not for certain. 
 

To give you and idea the annual taxes on my house alone are 10k. So I hit the SALT cap with just that. 
 

but even with the standard deduction last year (family of 4) out effective tax rate was 16.x% which was only 3 or 4 tenths higher than what we were for the previous 6 or so years before the change. 
 

so. It depends on your situation. I have two children so claiming the standard deduction for all of us basically washed out what we lose on SALT cap. 

[The Evil Genius]

Just checked our effective tax rate back to tax year 2017, I believe the last year before the 10k SALT cap..

 

It was 12.81% in 2017, 16.28% in 2018, 16.41% in 2019, 16.63% in 2020, 16.58% in 2021, and now 16.63% in 2022.

 

So...yeah we're getting boned with that 10k SALT cap. 

Edited March 3, 2023 by The Evil Genius

[Ball Security]

2 minutes ago, The Evil Genius said:

Just checked our effective tax rate back to tax year 2017, I believe the last year before the 10k SALT cap..

 

It was 12.81% in 2017, 16.28% in 2018, 16.41% in 2019, 16.63% in 2020, 16.58% in 2021, and now 16.63% in 2022.

 

So...yeah we're getting boned with that 10k SALT cap. 

Thanks a lot, Brandon. Amirite?

[Larry]

9 minutes ago, The Evil Genius said:

Just checked our effective tax rate back to tax year 2017, I believe the last year before the 10k SALT cap..

 

It was 12.81% in 2017, 16.28% in 2018, 16.41% in 2019, 16.63% in 2020, 16.58% in 2021, and now 16.63% in 2022.

 

So...yeah we're getting boned with that 10k SALT cap. 

 

Well, it's your own fault, for

 

1)  Living in a liberal state where wages are high

2)  Making a high wage.  

 

[tshile]

26 minutes ago, The Evil Genius said:

Just checked our effective tax rate back to tax year 2017, I believe the last year before the 10k SALT cap..

 

It was 12.81% in 2017, 16.28% in 2018, 16.41% in 2019, 16.63% in 2020, 16.58% in 2021, and now 16.63% in 2022.

 

So...yeah we're getting boned with that 10k SALT cap. 

See mines been 15-16% and this year looks like 17%. But our income has more than doubled over that time too. 
 

The biggest reason ours has gone up is our income increase makes us not eligible for the child deductions and credits.

 

The new plan hurts people in high tax states though. imo you should have been paying more before and now you’re more inline with what makes sense. We should both be paying more imo.  12% is way too low imo.
 

Definitely owe 10.8k though. 
 

But that’s entirely my fault for screwing up our w4’s.  Which have now been fixed. 

Should only owe 1-2k next year which is perfect. 

Edited March 3, 2023 by tshile

[tshile]

After having a few years of seeing how the SALT cap works, I’m ok with it. Open to other ideas but I have a problem with your federal tax obligation being significantly lower because you live in a state with high taxes. For your federal taxes, your state taxes should be irrelevant. I shouldn’t have to pay more to the feds because you choose to live in a high tax state. 

[TheGreatBuzz]

Here's to being mostly tax-exempt.

[tshile]

6 minutes ago, TheGreatBuzz said:

Here's to being mostly tax-exempt.

def ok with that. Least we can do is pick up your tax bill. You gave up far more. 

[Larry]

1 hour ago, tshile said:

def ok with that. Least we can do is pick up your tax bill. You gave up far more. 

 

 

[The Evil Genius]

 

[LadySkinsFan]

On 2/16/2023 at 12:03 PM, LadySkinsFan said:

Here's what's ****ed up about the tax system for those of us on Social Security: they lump back into your 1099-social security the money they take out monthly for Medicare Part B contributions. So we never see that money, it's what we are charged monthly for Medicare Part B, yet it's part of our total Social Security income. Thankfully I think the increased standard deduction will be enough so I don't have to pay any taxes and Texas doesn't charge personal income tax for seniors. I haven't done my forms yet so I'll see when I do.

 

Well, I was doing better this year until my rent increase, more than is usual, wiped out my SS COLA and then some. Back to creative budgeting. 

[China]

IRS plans to increase audit rates of wealthy taxpayers by 50%

 

The Internal Revenue Service detailed its plans Thursday to significantly ramp up audit rates of wealthy taxpayers and large corporations, using funds provided by the Democrat-backed Inflation Reduction Act that passed in 2022.

 

The audit rate of taxpayers earning more than $10 million is expected to increase by 50%, going up from 11% in 2019 to 16.5% in 2026.

 

The IRS also plans to triple the audit rates of large corporations with assets over $250 million, as well as increase the audit rates of business partnerships with assets over $10 million by tenfold over the seven-year period.

 

Despite the expected increases, audit rates won’t exceed those reached in 2010 because the number of filings by large corporations, partnerships and wealthy individuals have grown and become more complex, the IRS said.

 

The IRS is using the influx of money provided by the Inflation Reduction Act to modernize the agency, improve services for taxpayers and collect more tax revenue from those who have not been paying what they owe. But Republicans, concerned that small businesses and the middle class could be targeted by IRS auditors, have made several efforts to chip away at the agency’s funding.

 

IRS Commissioner Danny Werfel has repeatedly said the agency is committed to shielding American households that earn less than $400,000 a year from an increase in audit rates. Specifically, audit rates of those Americans will not exceed what they were in 2018, a record-low year, he said Thursday on a call with reporters.

 

“As I’ve said over and over again, there is no new wave of audits coming for middle- and low-income (taxpayers), coming for mom-and-pops. That is not in our plans in any way, shape or form,” Werfel said.

 

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