View Full Version : 2018 Taxes - Did the tax cut hurt or help you?
DenverGP
02-13-2019, 19:06
Just finished up my taxes for this year.
I had used an IRS calculator mid year which suggested my withholdings might be low, so I bumped up my 401k contrib and had a little more tax withholding for the last half of the year. Apparently over-corrected, because I'm getting back about $800.
I've seen a bunch of news stories about how peoples returns are lower this year. But that could just be because there was less withheld from their check all year due to the cuts, so therefore they weren't over-withheld by as much. If we used the "refund amount" like the news stories do, it would look the tax cut hurt me, because my refund was lower this year. But that's just because my withholdings were lower.
The important number is from the "total tax" line.
No change in living situation from last year. Last year I itemized all my deductions, mortgage interest, charitable contributions, etc. This year just used the standard $24000 deduction for married filing joint. My taxable income increased by $3000 (it actually increased by a larger amount, but I pushed most of the increase into my 401k). But my Total Tax line decreased by $1350.
So taxes were much easier, and I saved a bit.
Haven?t even thought about mine yet. I usually cut the IRS a check for the $1K - $2K I shorted them throughout the year. Two years ago I had to cut them a check for about $4K. If I can get that number back to where it was I?ll be stoked.
Haven't even looked this year, but I know already that I'm in trouble, especially if I owe anything close to what I owed last year. I contributed nothing to any pre-tax accounts this year so I think I'll owe way more. Ouch.
Bailey Guns
02-13-2019, 19:24
Ours was a good news/bad news year.
Good news, our incomes went up. I got a nice raise from my company due to the corporate tax changes. Wife's went up substantially.
Bad news, I claimed married/1 all year, wife claimed married/0 all year. Her employer way under-withheld for some unknown reason and we're gonna wind up paying close to $4500, including a penalty. Our MAGI is too high so retirement deductions are limited.
But, it's way easier this year. The $24000 standard deduction is more than what we could've come up with in traditional deductions. We've adjusted withholdings already this year...not gonna get caught like that again.
I’ll find out tomorrow, not very optimistic.
cfortune
02-13-2019, 19:50
My income bumped me into the next bracket and my deductions were somehow significantly less (like 6000 less than last year) even though nothing has changed other than my income. Getting back about 2500 less than I did last year.
Income went up and was married this year.
Went from large refunds in the past to a $4 refund this year.
colorider
02-13-2019, 20:21
A lot of people are getting less of a refund because they paid less in withholding. They kinda skip that part in the news stories. Lots of people just looking at the refund check amount instead of what they paid overall.
Would love to have them remove "withholding" and make everyone cut a check at the end of the year so people SEE how much the govt is taking.
Of course that would only account for about half the population and the rest would still get a check from the govt.
I hate taxes
SouthPaw
02-13-2019, 21:37
Mine was pretty much identical to previous years.
Bailey Guns
02-13-2019, 22:12
I don't hate taxes. I'll gladly pay my fair share. What I hate is the people who think they're entitled to my money just because the government, at various levels, will take it from me and give it to them.
Bailey Guns
02-13-2019, 22:13
Would love to have them remove "withholding" and make everyone cut a check at the end of the year so people SEE how much the govt is taking.
I'd be OK with that.
USMC88-93
02-13-2019, 22:48
Identical to previous year, and I received the state return direct deposit in 7 days after filing. The Federal direct deposit took 10 days.
GilpinGuy
02-14-2019, 00:13
Identical to previous year, and I received the state return direct deposit in 7 days after filing. The Federal direct deposit took 10 days.
So that government shutdown really f-ed your shit up. [Sarcasm2]
Afraid to even look. I take it up the keister every year. 1st world problem.
hollohas
02-14-2019, 07:16
I was able to use the standard deduction for the first time this year. Overall, my effective federal rate went down by about a point. But only because of the child tax credit. However, because of how the state income tax is calculated, my state tax rate actually went up. Colorado is getting a higher percentage of my money this year even though my tax bracket didn't actually change which is lame.
But overall, my combined state/fed tax percentage went down by about 1/2 point so it's a win.
Got my taxes done today. Refund amount was pretty much the same as previous years. The biggest difference is how much less overall taxes were withheld through the whole year. This was a significant amount (almost 5K) even though we made more this year and still got a refund of about the same amount as last year. Paying 5K less in overall taxes and still getting a refund = WIN in my book.
newracer
02-14-2019, 13:59
Past years we usually got a small refund from federal and paid a small amount to state. This year we are paying a small amount to both. Overall tax liability is less than previous years.
$1k less in fed refund, $150 less from the state. Now my goal is always to not use the .gov as a savings plan but still!!
Bailey Guns
02-14-2019, 19:43
1st world problem.
Yeah, we're pretty fortunate. Our total federal tax bill for 2018 is 50% more than 2017! Income was up by 22%. So it's hard to tell how the new tax laws affected us.
Grant H.
02-14-2019, 20:18
Haven't checked.
Expecting to cut a 5 figure check, and the first digit isnt a 1, to the IRS.
Hooray being a 1099 business owner...
I made about 20K more this year than I did last year. I'm a 1099 who hasn't quite gotten around to quarterlies yet...but I still owe only $700 or so more than last year and got another 3-4K in deductions this year.
Haven't checked.
Expecting to cut a 5 figure check, and the first digit isnt a 1, to the IRS.
Hooray being a 1099 business owner...
I made about 20K more this year than I did last year. I'm a 1099 who hasn't quite gotten around to quarterlies yet...but I still owe only $700 or so more than last year and got another 3-4K in deductions this year.
I'm in this camp.
Bailey Guns
02-14-2019, 20:26
Haven't checked.
Expecting to cut a 5 figure check, and the first digit isnt a 1, to the IRS.
Hooray being a 1099 business owner...
Damn...suddenly I feel much better! Thanks!
[Coffee]
DenverGP
02-14-2019, 20:27
A lot of people here are mentioning a smaller refund (or having to pay), but aren't mentioning if their total tax actually went up or down... this is the same thing the fake news is harping on.
When the tax change went into effect, most peoples withholdings automatically dropped, so its no surprise that many people didn't get as much back. But I'd bet that for most, their total tax amount decreased.
Yeah...according to my CPA, had my taxes been done under the old system, my refund would've been about double what I received back. Kinda pissed me off, but meh, it is what it is. Taxation is theft.
Grant H.
02-14-2019, 20:55
I made about 20K more this year than I did last year. I'm a 1099 who hasn't quite gotten around to quarterlies yet...but I still owe only $700 or so more than last year and got another 3-4K in deductions this year.
Yeah, I've never bothered with quarterlies... I probably should, but I really hate doing taxes, so I do them once a year.
I'm in this camp.
It sucks, but I do like being a 1099 for a fair number of reasons.
Buying tools and such with pre-tax money is one of the cool ones.
Damn...suddenly I feel much better! Thanks!
[Coffee]
Lol. You're welcome.
It sucks, but it's just part of the game.
Grant H.
02-14-2019, 20:57
A lot of people here are mentioning a smaller refund (or having to pay), but aren't mentioning if their total tax actually went up or down... this is the same thing the fake news is harping on.
When the tax change went into effect, most peoples withholdings automatically dropped, so its no surprise that many people didn't get as much back. But I'd bet that for most, their total tax amount decreased.
I'll be able to tell pretty quickly when I get around to it.
In general, with the standard deduction nearly doubling, that should make most folks tax bills lower.
It sucks, but I do like being a 1099 for a fair number of reasons.
Buying tools and such with pre-tax money is one of the cool ones.
I'm looking forward to writing off the miles to my favorite liquor store from now on. I have a hard time with quarterlies as well. Doesn't help when you never have any idea how much you're going to make. For most of this year I had made so little money that I wasn't even sure if I was going to owe any taxes. Then a hurricane happened and I made 40% of my annual total in 3 weeks.
DenverGP
02-14-2019, 21:03
I was surprised when I realized that last year, my itemized deductions were about 23K. This year we had less deductions but it didn't matter since we took the standard 24k. But even with last years and this years deductions being close, the total tax was significantly lower on slightly higher income.
clodhopper
02-14-2019, 21:04
At Squeeze:
Wait a minute, you are griping about a difference in the change you receive from a payment transaction. Are you saying you are paying more tax now than before, or are you bitching that not enough of your money was withheld from you so you could get it handed back to you?
Too many people are getting focused on the wrong number. Buying a $6 item with a $20 bill, getting $14 in change is somehow viewed as far better than buying the same item for $3 with a $10 bill and getting $7 change back. Withholding for taxes has completely screwed people's financial common sense.
Less withholding and about the same tax liability. I'll take that as a 'win'.
DenverGP
02-14-2019, 23:15
Too many people are getting focused on the wrong number.
A lot of people seem to think that the tax refund they are getting is the government giving them money, rather than the government giving them back the money they could have been taking home all year long.
But thats why the media/dems will be able to convince a large percentage of the country that the tax cuts didn't help them.
If your federal tax return doesn't bite you in the ass, I'm sure your next purchase from your favorite online retailer will.
Oh, relating to the original question; the changes made to dependent deductions will definitely hurt me.
Would love to have them remove "withholding" and make everyone cut a check at the end of the year so people SEE how much the govt is taking.
Of course that would only account for about half the population and the rest would still get a check from the govt.
I hate taxes
Imagine the scenario of U.S. government tax agents going door to door collecting payments for the king as has happened throughout history. Very suddenly the populous would understand the value and meaning of the Second Amendment. The people would also come to know the insidious nature of confiscatory gun control schemes. Eventually all governments work toward self perpetuation, not on behalf of the people it ostensibly serves.
Yes, the low-info, media educated public very confused about tax liability vs. refund/owed. I guess a lot of folks were using withholding as an interest free savings account or annual bonus? Now I understand how AOC got elected. Most people really have a paycheck-to-paycheck mindset.
My numbers aren't finalized, tax guy has them now. If my projections are right (2017 1014 vs 2018 1040 methods) I am looking at a big swing in my favor and last year was one of my worst years for biz revenue.
Having an S-Corp* helped along with the child tax credit and lower rate brackets. I was getting phased out on the CTC but now am not. If you have adult dependents, I could see some pain in loosing the exemptions and not having a recovery with the CTC.
My deductions for most years are over the $24K but not last year. We gave less to charity because I made much less. So 2018 is just under the $24K limit. I am still trying to understand the scenarios in which this is a problem for people. I can't fathom paying that much in mortgage interest (or any other category) where this is problem. And you can still deduct/schedule just not above the SALT cap.
*All you guys running as sole props/1099 income should seriously look into an S-Corp if you are going to run your businesses for more than a year or two. There is some monthly overhead expense/time but you more than make up for it in lower taxes. And because you pay yourself W-2 you don't have to do the quarterly estimates/payments.
Refund was lower by about 2k (last year was ~2400, this year was 454), but I honestly have no idea on if it hurt or helped since my income fluctuated up so much compared to the previous tax year. But we also added a kid. I dunno.
Grant H.
02-15-2019, 10:49
Yes, the low-info, media educated public very confused about tax liability vs. refund/owed. I guess a lot of folks were using withholding as an interest free savings account or annual bonus? Now I understand how AOC got elected. Most people really have a paycheck-to-paycheck mindset.
Most of the folks that I used to work with at a W-2 job were very much paycheck to paycheck minded. To the point of figuring out if they could make the last $14 dollars in their checking account pay for lunches out for the next 3 days till pay day. (Actual example that I distinctly remember). And no, they didn't have any savings.
These folks absolutely looked at their tax refund as "additional" income/bonus once a year.
The significant portion of this country, even if they make good money, can't manage it to save their lives, and very much live paycheck to paycheck. Their house, both cars, the TV, the appliances, etc are ALL on credit. They don't look at if they can afford said thing, they look if they can scrape enough money together each month for the minimum monthly payment...
*All you guys running as sole props/1099 income should seriously look into an S-Corp if you are going to run your businesses for more than a year or two. There is some monthly overhead expense/time but you more than make up for it in lower taxes. And because you pay yourself W-2 you don't have to do the quarterly estimates/payments.
I've looked at it, and given how I move around on contracts, the additional paperwork doesn't make sense.
Also, given the phone call I just got, I may not be a 1099 anymore in the near future...
I'm excellent at managing money, as long as I don't have any.
The only way to really compare is look at Gross income in 2017 with taxes paid and convert to a %
Now do the same to 2018
Agree.. Some people think they are actually getting less money when in fact they are getting more money
I think it's a darn shame that personal financial management isn't a required course study at the elementary, junior high and high school levels.
I think it's a darn shame that personal financial management isn't a required course study at the elementary, junior high and high school levels.
How can an organization at large (public schooling), that is utterly, egregiously wasteful in its own budgeting teach about budgeting?
https://i.imgur.com/btck1ZA.jpg
XC700116
02-16-2019, 00:03
$103 less taxes paid on $4600 more income all said and done.
[snip]
I've looked at it, and given how I move around on contracts, the additional paperwork doesn't make sense.
Also, given the phone call I just got, I may not be a 1099 anymore in the near future...
The S-Corp is specific to you and your business and is on the level of your LLC filing, exists for all your customers.
Taking a new contract is as easy for me as setting up a new customer in QuickBooks and setting up the job. They can then 1099 me all they want, doesn't matter, it's corp-to-corp. The difference is how I handle the money coming in and pay myself. I also have better accounting if they don't 1099 me because everything is running through the corp.
The only time it doesn't make sense is if you are transitioning between contract/employee work or back and forth (which would look sketchy to the IRS).
So... hrm.
When we went through HR Block, they calculated our return at 454 dollars.
I just logged in to the bank account and saw our return direct deposited: way higher (6.5k).
So now I guess I gotta go back to HR Block and have them double look. I can’t imagine the IRS corrected HR Block and found a mistake in our favor. If they did, awesome. If not, then I want to get it back ASAP so we done get hit with interest charges on an erroneous return.
Anyone ever experienced this issue and have any advice on steps to take?
ChickNorris
02-21-2019, 23:48
Hehehe ...Parabolas.
So... hrm.
When we went through HR Block, they calculated our return at 454 dollars.
I just logged in to the bank account and saw our return direct deposited: way higher (6.5k).
So now I guess I gotta go back to HR Block and have them double look. I can’t imagine the IRS corrected HR Block and found a mistake in our favor. If they did, awesome. If not, then I want to get it back ASAP so we done get hit with interest charges on an erroneous return.
Anyone ever experienced this issue and have any advice on steps to take?
Yea, I'd be looking hard at it. I suppose it's possible HR messed up royally. I'd be pounding on someone's desk over that if so.
While far fetched, it's entirely possible that someone else filed fraudulently, but your bank routing info got tied to your SSN.
Couple years ago someone tried to file my taxes for a refund. ROTFLMFAO. I never get a refund. I pay big $$$$ every year. Thankfully, the IRS must have smart enough algos to figure that one out and did not issue a refund to the scum. Interestingly, they accepted my extension in April as is usual, but the fraud had been committed months earlier. Why they didn't contact me is a mystery. I only found out when they rejected my e-file in October with a code that indicated I had to contact the IRS before paper filing. They agent basically told me they were waiting for me to contact them. It was a huge hassle for me to straighten out, prove I was who I said I was, and actually file that year.
So... hrm.
When we went through HR Block, they calculated our return at 454 dollars.
I just logged in to the bank account and saw our return direct deposited: way higher (6.5k).
So now I guess I gotta go back to HR Block and have them double look. I can’t imagine the IRS corrected HR Block and found a mistake in our favor. If they did, awesome. If not, then I want to get it back ASAP so we done get hit with interest charges on an erroneous return.
Anyone ever experienced this issue and have any advice on steps to take?
HR Block called my wife back. They said that when we filed our taxes there was a system glitch (unclear if on theirs or IRS) and wasn't calculating the child tax credit, so the IRS has been correcting this before sending returns. So, according to them, we indeed have a return which is much higher than we originally thought. However, it comports much more with what I'd been calculating w/ the help of online calcs prior to filing.
I plan to go into the office today to try to get something amended/in writing, so if there are any issues in the future we have proof of what we were told.
Any idea how long it takes to get the IRS explanation letter for refunds?
HR Block called my wife back. They said that when we filed our taxes there was a system glitch (unclear if on theirs or IRS) and wasn't calculating the child tax credit, so the IRS has been correcting this before sending returns. So, according to them, we indeed have a return which is much higher than we originally thought. However, it comports much more with what I'd been calculating w/ the help of online calcs prior to filing.
I plan to go into the office today to try to get something amended/in writing, so if there are any issues in the future we have proof of what we were told.
Any idea how long it takes to get the IRS explanation letter for refunds?
My experience is they'll claim they sent you two letters that were ignored and the third will be a demanding letter threatening asset seizure or wage garnishment.
My experience is they'll claim they sent you two letters that were ignored and the third will be a demanding letter threatening asset seizure or wage garnishment.
Buddy reminded me that Credit Karma has a tax filing service for free. So I just went through and entered in all my applicable info, dependents, etc. -- essentially did the same thing HR Block did, and the return amount is estimated at the exact amount we had deposited.
I went by HR Block today and they said the glitch was related to child tax credit (confirming what they said on the phone).
So, at this point I think I'm out of the woods on this.
This money will go towards our mortgage payment's monthly nest egg. As of now we have 5 months of mortgage payments saved for when we move. That way, if the house doesn't sell or is delayed, we aren't tight on our budget at the new place due to paying rent/mortgage or mortgage/mortgage. If all goes quickly and well, we'll shift it to paying off any vehicle debt we may have at that time.
Once we do that, the only debt we will have is a house, when we decide to buy again.
BushMasterBoy
02-23-2019, 00:13
I think it's a darn shame that personal financial management isn't a required course study at the elementary, junior high and high school levels.
They don't teach much about law either. Law and money seem to be taboo subjects. The rules on both seem to be changed around to suit our masters. It is a national disgrace, worse than military medicine.
My final numbers are in from the accountants.
$5,900 in my favor on the Fed comparing the 2017 1040 to 2018. With the 2017 I would have owed more, with the 2018 rules I get a refund.
I didn't even make that much last year, again, my worst year. With the biz income deduction there is a big incentive to make more.
My final numbers are in from the accountants.
$5,900 in my favor on the Fed comparing the 2017 1040 to 2018. With the 2017 I would have owed more, with the 2018 rules I get a refund.
I didn't even make that much last year, again, my worst year. With the biz income deduction there is a big incentive to make more.
By our powers combined, we can make a heartfelt difference:
https://www.ebay.com/itm/24-000-Copies-Customized-Pocket-Constitution-of-the-United-States/282880898912?hash=item41dd03f760:g:rikAAOSwWnFV~Lp R:rk:2:pf:0
By our powers combined, we can make a heartfelt difference:
https://www.ebay.com/itm/24-000-Copies-Customized-Pocket-Constitution-of-the-United-States/282880898912?hash=item41dd03f760:g:rikAAOSwWnFV~Lp R:rk:2:pf:0
I would take out a 2nd and 3rd mortgage on my house if it meant the words mean what they plainly mean and all issues were settled without violence.
So... hrm.
When we went through HR Block, they calculated our return at 454 dollars.
I just logged in to the bank account and saw our return direct deposited: way higher (6.5k).
So now I guess I gotta go back to HR Block and have them double look. I can?t imagine the IRS corrected HR Block and found a mistake in our favor. If they did, awesome. If not, then I want to get it back ASAP so we done get hit with interest charges on an erroneous return.
Anyone ever experienced this issue and have any advice on steps to take?
Similar. One year they were off by about $2500 in the state?s favor. Was Block?s fault so I made them pay out in their guarantee. They screwed up two years in a row. I now use a professional.
Sent from my iPhone using Tapatalk
OtterbatHellcat
02-27-2019, 21:04
I've been using Block for about 12 years and never had a problem with anything like that.
Got the IRS letter today. They confirmed the proper return as was deposited and said that our return as filed was incorrect and they corrected it. According to HR Block there was a "glitch" in the system on calculating child tax credits. I asked if it was in their system or the IRS and they said the IRS. However, that makes very little sense to me unless HR Block's software is directly tied into the IRS for all actions -- something I find hard to believe; I'd think that would be a security nightmare in addition to the logistical PITA. Given that I would assume their folks go through training, up to and including "filing" full returns of varied natures in a sandboxed environment, I'd assume they have programmed their software to handle all transactions without having to tie into the IRS systems. So what this means, if that's true, is their software jacked up somewhere or they didn't enter something correctly.
Either way, I'll be handling my own taxes from now on. With the 24k deduction and other rule changes, and my rather simple financial situation, I cannot imagine I'd need a CPA or similar unless I do my own business or win the lottery.
I would go to H&R and demand a refund. Their service was of negative value to you.
I stopped using them in 2003 when my preparer was a moonlighting employee from my financial services firm with no tax background whatsoever. Realized it was just data entry. She actually asked me about eligibility on some moving expense (for a job).
CTC was another major change. Phase out was modified so a lot more folks qualify for it up to a yuge amount of income (married). But there is no excuse for not having this calculated correctly. YOUR INDEPENDENTS, AGE, AND SSNs GO AT THE TOP OF 1040!!! How could they mess that up? [LOL]
Another smaller change I found but didn't expect... The higher standard deduction ($24K married) eliminated my state add-back of state taxes withheld on my CO return. So this saved on my state taxes as well. You are only required to "add back" if you itemize. It's line 4 or 5 of CO 104. So I saved 4.63% on CO taxes withheld in 2018.
I would go to H&R and demand a refund. Their service was of negative value to you.
I stopped using them in 2003 when my preparer was a moonlighting employee from my financial services firm with no tax background whatsoever. Realized it was just data entry. She actually asked me about eligibility on some moving expense (for a job).
CTC was another major change. Phase out was modified so a lot more folks qualify for it up to a yuge amount of income (married). But there is no excuse for not having this calculated correctly. YOUR INDEPENDENTS, AGE, AND SSNs GO AT THE TOP OF 1040!!! How could they mess that up? [LOL]
Another smaller change I found but didn't expect... The higher standard deduction ($24K married) eliminated my state add-back of state taxes withheld on my CO return. So this saved on my state taxes as well. You are only required to "add back" if you itemize. It's line 4 or 5 of CO 104. So I saved 4.63% on CO taxes withheld in 2018.
I dunno if they would refund. I can certainly try. I put the cost on a CC (paid off monthly), so I suppose I could always challenge the charge.
I dunno if they would refund. I can certainly try. I put the cost on a CC (paid off monthly), so I suppose I could always challenge the charge.
I would raise hell. That's not a trivial difference and it was against you!
Made more, paid less taxes.
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