2018 Taxes - Did the tax cut hurt or help you?

[clodhopper]

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.

[DenverGP]

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.

[MED]

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.

[DenverGP]

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.

[Gman]

Less withholding and about the same tax liability. I'll take that as a 'win'.

[Skip]

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.

[Grant H.]

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...

[Skip]

[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).

[CS1983]

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.

[Irving]

I'm excellent at managing money, as long as I don't have any.