Anyone nervous to do their taxes?

it seemed to me like owing $28 is the tax scenario that is desirable in general. She should not increase her withholding, she should just have $75 a month go directly from her paycheck into a savings account so she can get that $900 she needs.

i agree completely but unless someone has the self-control to put that money aside it's just going to get spent away b/c so many have the mindset that 'it's just $75 per month, it's not that much/won't make a difference saved'. $900 in one check is a nice chunk of change but they just cant equate that to being the result of $75 set aside 12 times over the course of a year.

it's not an uncommon mindset. i've known people all my life who saw tax refunds as their means of saving money, never considering that the same money received over 12 months via their paycheck could be earning some form of interest OR paying off those high interest credit cards sooner vs. later. this is something i've had to point out to dd whose doing her first full time employed tax return since graduating college. she works with allot of people in the same 'boat' as herself-single, no kids. renters... so income and deductions are similar. she hears them excitedly talking about how much they are getting for their returns and then she looks at the maybe $100 or so she may get and it can seem disappointing until i remind her that by getting those extra dollars each month she's able to throw more at her student loans such that she will be payed off and have saved in interest many times the amount of those refund checks her co-workers are getting.
 
So, my dh’s check is the same every month. It never changed at all after the tax changes. Since it was big news at the time how most would be seeing more money in their checks and many large companies were giving one time bonuses to their employees, I (possibly incorrectly) assumed my dh saw no change since he works for a nonprofit. They are exempt from some taxes so I figured the tax changes were not ones they have to pay. I kept asking my dh to ask someone at work but he’s super busy and there really isn’t a lot there in terms of a ‘HR’ dept lol. I even tried to research it some but all I could really find was how there would probably be less charitable giving due to the changes, and that’s been true for my dh’s workplace for sure.


Gotcha. And definitely agree on the fact that less charitable giving will be happening. Nationwide giving was only down slightly for 2018, but the industry’s thinking is that now is when most Americans are realizing how the tax changes are impacting them and giving will decline even more in 2019. Only time will tell!

Jerseygal – Thanks for the reminder on the new $500 child credit. I guess I’ll keep him. But I will have to adjust withholding soon to accommodate the difference!
 
Meanwhile, I'm still waiting on my 1095-B from my health insurance company. Not allowed to request another one for another few days, according to their "rules". But I got an EOB that arrived 2 days after it was mailed, so something isn't adding up (They told me they mailed 1095s out January 28).
 
So, my dh’s check is the same every month. It never changed at all after the tax changes. Since it was big news at the time how most would be seeing more money in their checks and many large companies were giving one time bonuses to their employees, I (possibly incorrectly) assumed my dh saw no change since he works for a nonprofit. They are exempt from some taxes so I figured the tax changes were not ones they have to pay. I kept asking my dh to ask someone at work but he’s super busy and there really isn’t a lot there in terms of a ‘HR’ dept lol. I even tried to research it some but all I could really find was how there would probably be less charitable giving due to the changes, and that’s been true for my dh’s workplace for sure.

I do the finances for a nonprofit. The fact that nonprofits do not pay income taxes has nothing to do with employee withholdings and their personal income taxes. All year long our payroll system was receiving updates with new tax tables. Just know that you can always fill out a new federal and /or state W4 to adjust your withholdings. Employees really need to be proactive because unfortunately HR sometimes is not.
 


I do the finances for a nonprofit. The fact that nonprofits do not pay income taxes has nothing to do with employee withholdings and their personal income taxes. All year long our payroll system was receiving updates with new tax tables. Just know that you can always fill out a new federal and /or state W4 to adjust your withholdings. Employees really need to be proactive because unfortunately HR sometimes is not.
Yes, I know that in my head but just wasn't sure if I was missing something since it seemed like all the talk was everyone else getting bigger paychecks. However, I did some reading last night when I couldn't sleep and it appears over 50% of people were also not seeing any change in their paychecks by Oct 2018. I'm guessing since we didn't change our withholding, we just had more taxes taken out. However, we are not getting a bigger refund this year so idk about that either. We also owe our state way more than usual. Did the tax reform affect state differently?
 
Yes, I know that in my head but just wasn't sure if I was missing something since it seemed like all the talk was everyone else getting bigger paychecks. However, I did some reading last night when I couldn't sleep and it appears over 50% of people were also not seeing any change in their paychecks by Oct 2018. I'm guessing since we didn't change our withholding, we just had more taxes taken out. However, we are not getting a bigger refund this year so idk about that either. We also owe our state way more than usual. Did the tax reform affect state differently?

Yes, some states, that have low standard deductions, but require using the same deduction on the state form that you used on the federal form, got large windfalls - aka, indirectly raised taxes. Other states that require using the same taxable income figures (aka ones with less itemized numbers now with limited deductions for real estate, for example) also got windfalls. NJ pretty much spent its windfall (according to my mom - which would not surprise me). VA is giving back most of its windfall, and keeping about 1/6 of it in an increase (in the silver lining approach, the governor's troubles actually helped the taxpayer b/c before his scandals, he also wanted to spend it all)...not sure what other states are doing or if they are even mentioning it...
 
Gotcha. And definitely agree on the fact that less charitable giving will be happening. Nationwide giving was only down slightly for 2018, but the industry’s thinking is that now is when most Americans are realizing how the tax changes are impacting them and giving will decline even more in 2019. Only time will tell!

Jerseygal – Thanks for the reminder on the new $500 child credit. I guess I’ll keep him. But I will have to adjust withholding soon to accommodate the difference!
I'm losing mine for 2019 tax year,lol!:goodvibes Youngest DS finishing his masters in August, starting his job this fall in NYC and moving out with a few college buddies. Very bitter, sweet.so excited for him and for us too, haha!:laughing::dance3:
 


I just typed in all my crap on turbotax. You'd think being a nurse and law enforcement, it wouldn't be that difficult. It is. TT says for us to take the standard deduction, my federal taxes are up $1400. However, my state (that gave me $11 last year) is giving me $1600 this year AND I owe a penalty for under estimating my taxes? I've never had that one before. Usually we end up paying about $3000. This year it's $4400 and I get to pay a penalty. BTW, DH claims 0 and I tried claiming 1 and taking out 16% pretax for retirement... now I guess I'll be 0 and 16%.
 
I have no idea how it's going to fall out. The child tax credit increase and reduced phaseouts will be good, but the reduced SALT deduction and no exemptions scare me. I also have some self-employment income and I've heard there's a new deduction for that, but I haven't done any research yet.

Anyone been pleasantly surprised?
I have found out that the child tax credit reduces your tax liability, however it does not go towards your business for self tax. Also, only a portion of it is refundable, leaving them with some with a balance due still.>:(
 
Our refund has been dwindling the last 4 years or so but this year, from my very initial calculations, our refund seems to be back up a couple hundred. I expected to lose the refund or pay some so I'm pleasantly surprised.
One's who take the standard deduction and no dependents are in a better tax situation then those that itemize. Thanks to this tax overhaul we have 8k less in write offs of itemizing and child tax credit isnt helping us : (
 
One's who take the standard deduction and no dependents are in a better tax situation then those that itemize. Thanks to this tax overhaul we have 8k less in write offs of itemizing and child tax credit isnt helping us : (
My comment was from early on when I was running rough numbers. Things aren't looking as rosy for us anymore. Our refund is less and we normally break even (give or take $10) on state but this year, we will owe several hundred to the state.
 
Refunds don't matter. It's your total tax liability so saying my refund is more/less than last year really means nothing. Last year I owed $900. This year I got a refund of $400. I could have easily owed $900 again this year but I adjusted my withholding to get more withheld per paycheck so I didn't have to pay again. If my tax liability is $20,000 but I only had $19,000 withheld then I would owe $1,000. Same liability of $20,000 but I withheld $22,000 then I get a $2,000 refund. Same tax liability, different refund/owe come tax time.

I can't really do an income to income comparison since my income increased by about $25,000 in 2018 but my effective tax rate is basically the same both years. But last year, before I switched jobs, I did notice an increase in my pay once the withholding tables were updated. Less was being taken out per pay period. Not much, but it was still less.
 
I just typed in all my crap on turbotax. You'd think being a nurse and law enforcement, it wouldn't be that difficult. It is. TT says for us to take the standard deduction, my federal taxes are up $1400. However, my state (that gave me $11 last year) is giving me $1600 this year AND I owe a penalty for under estimating my taxes? I've never had that one before. Usually we end up paying about $3000. This year it's $4400 and I get to pay a penalty. BTW, DH claims 0 and I tried claiming 1 and taking out 16% pretax for retirement... now I guess I'll be 0 and 16%.

Are you sure Turbotax is right? Your work must be severely underestimating your tax liability all year and not withholding enough b/c if you make $38K, you are in the 22% bracket...and if you jump up b/c of a spouse's income, it's only 2% higher for the tax...and 2% of 100K is still only $2K...

Something just seems wonky if you are a normal standard deduction taker...I might actually try doing your taxes by hand if they are that simple (just 2 incomes plus a standard deduction)...

PS - I guess if you make low enough each, they could be withholding at the 12% rate, but you actually fall mostly in the 22% rate...if that's the case, yeah, I'd sit down with withholding and just make them tax you at 22%, if you like getting a refund every year...
 
My comment was from early on when I was running rough numbers. Things aren't looking as rosy for us anymore. Our refund is less and we normally break even (give or take $10) on state but this year, we will owe several hundred to the state.
Sorry to hear this. Hopefully you will be more prepared for next years taxes and you can make the necessary adjustments to not owe next year.
 
Refunds don't matter. It's your total tax liability so saying my refund is more/less than last year really means nothing. Last year I owed $900. This year I got a refund of $400. I could have easily owed $900 again this year but I adjusted my withholding to get more withheld per paycheck so I didn't have to pay again. If my tax liability is $20,000 but I only had $19,000 withheld then I would owe $1,000. Same liability of $20,000 but I withheld $22,000 then I get a $2,000 refund. Same tax liability, different refund/owe come tax time.

I can't really do an income to income comparison since my income increased by about $25,000 in 2018 but my effective tax rate is basically the same both years. But last year, before I switched jobs, I did notice an increase in my pay once the withholding tables were updated. Less was being taken out per pay period. Not much, but it was still less.
I get what you are saying (though I am not tax-minded at all!). I do understand speaking in terms of refund is irrelevant but if we didn't adjust anything in terms of withholding, why do we owe so much on state this year and getting back less from feds? My dh's paycheck never changed after the tax reform went into effect so it isn't like we got more money upfront. Sorry...I'm just trying to make sense of this.
 
I get what you are saying (though I am not tax-minded at all!). I do understand speaking in terms of refund is irrelevant but if we didn't adjust anything in terms of withholding, why do we owe so much on state this year and getting back less from feds? My dh's paycheck never changed after the tax reform went into effect so it isn't like we got more money upfront. Sorry...I'm just trying to make sense of this.

Your state probably is like other states that either had to make changes to adjust to the new fed policies (not all states have income taxes, and not all have the same policies who do, so probably only 1/4 or less of states had direct effects)...or accept a windfall they could spend...sounds like your state decided to enjoy an indirect tax increase windfall to spend around the state...you could lobby your reps for changes, but it won't help much this year...

In VA, we started over 6 months ago on the "what to do with the windfall" talks...and it's still getting finalized this week b/c politics never moves fast...
 
Your state probably is like other states that either had to make changes to adjust to the new fed policies (not all states have income taxes, and not all have the same policies who do, so probably only 1/4 or less of states had direct effects)...or accept a windfall they could spend...sounds like your state decided to enjoy an indirect tax increase windfall to spend around the state...you could lobby your reps for changes, but it won't help much this year...

In VA, we started over 6 months ago on the "what to do with the windfall" talks...and it's still getting finalized this week b/c politics never moves fast...
Interesting. I've not heard or read that chatter (I'm in CO) but doesn't mean there isn't something like that here. We have lived here for 21 years and never owed more than $10 (first 15 years, we got large refunds) so oweing them $400+ is really weird.
 
I have found out that the child tax credit reduces your tax liability, however it does not go towards your business for self tax. Also, only a portion of it is refundable, leaving them with some with a balance due still.>:(

Yes, I just realized that this year!
 
So, I honestly thought we would be better off this year, but what I didn't realize is how much more money we actually made this year. Our situation is a bit complicated, DH owns his own business and since it's an S-Corp he gets paid hourly wages but those are basically what any other laborer would get paid. We pay FICA on wages only and the rest of the profit from the business is treated as other income on our federal 1040. This is great until it comes to calculating the additional child tax credit (the refundable portion). Since they know you didn't pay FICA on the majority of the income then they limit the refundable credit to a certain percentage of your wage income. Last few years we actually qualified for the earned income credit and since we made about 20k more this year, we did not qualify at all. So long story short, our taxable income went up 20k and our net taxes for both federal and state came to a $300 credit. I should mention we have 4 kids that all qualify for the child tax credit. Last year we made 20k less and our net tax was a $1700 credit.

We live in MO which is a very affordable place to live (our 1500sq ft house on 3 acres cost us $112k back in 2013). Our AGI this year was 68k compared to 48k last year (We had some business equipment we bought last year that qualified for Section 179 which is why our income was a bit lower, plus we had higher overall revenue this year). We have no other debt besides our house, so our bills are low, which is why we can afford to live off such a meager income!
 

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