Anyone nervous to do their taxes?

[mrsp1030]

I do our taxes via TurboTax yearly and have no clue what to expect with all the new rules, etc. We will just wait and see because we typically itemize and the good thing about turbotax is after going through that process, it will tell you what deduction is better to take for your situation: standard or itemize.

 

[DisArmyWife215]

you have to pay CITY income taxes too?

Yep. I'm sure I'll get it wrong since this is the first time I've worked in the city to pay.

 

[wishuponastar1984]

I feel like lots of people only look at the refund or amount due total and compare that to prior year. But really to know the difference from year to year we should be looking at the net tax amount from year to year (meaning net of child tax credits, earned income credit, etc).

I have tried explaining this to people. The 3 figures folks should be reviewing are:
Adjusted Gross Income - usually found at the bottom of page 1 which shows how much money you made. If the number goes up then you made more money!
Taxes for the year - your total tax expense for the year. This is not your refund or balance due
Effective Tax Rate - basically the % of Expense divided by AGI.

If your ETR is better year over year then you are paying less of your overall income to taxes. It really doesn't matter what is withheld every month as that is just an estimate. You need to look at the actual expense for the year not whether one year you got a refund and one year you had to pay.

You can have two people who make same income, have same filing status, same deductions but one puts on their W-4 that they are claiming 1 allowance and the other claims 4 allowances (you pick the number) but this has no effect on your total tax expense for the year as it would be equal. For this scenario let's assume that they are single with no dependents. Your company can't police what you put on your W4. Person who claimed 1 allowance will likely get a refund or be close to even but person 2 who claimed 4 allowances will likely owe. The tax bill is the tax bill. One just paid in nice monthly installments via their paycheck where person 2 decided he wanted to pay most of his expense in one big payment

 

[iivye]

I have extra federal and state withholding from every paycheck so I usually get a large refund. I know that I am giving the govt an interest free loan but I would honestly spend the money and not save it so it works for me. Also, my husband owns rental properties in another state with his brother and one year we owed $2,000 because he didn't tell me one of the houses was sold and the LLC closed out so I like to have some extra paid in just in case. I never want to be in the position to owe a large amount again.

 

[wvjules]

I efiled Fed through Turbo Tax this morning and then filed my Maryland taxes on their website. I'm all done until next year.

My EFT was almost 15%.

 

[Music City Mama]

I did my taxes this weekend. We lost the individual exemptions, but since the standard deduction doubled, that part was kind of a wash. Since the child tax credit doubled, we're getting more money back this year.

 

[Superchikk]

I'm reading your situation to be different than @kydisneyfans. They indicate they "work from home" and lost ability to claim expenses...this is true if they are considered an employee and are paid on a W-2 as Employee Business Expenses are disallowed. You mentioned you are self-employed (paid w/cash or on a 1099), this qualifies you to claim your expenses for your Self-Employed Business on Schedule C...nothing changed as far as claiming expenses in this situation.

That's good to know. We just got our organizer from our tax accountant today, and it basically looks the same as it has in years past - at least the information they're requesting. Fingers still crossed, but thanks for explaining that. It does make a difference!

 

[Superchikk]

I have extra federal and state withholding from every paycheck so I usually get a large refund. I know that I am giving the govt an interest free loan but I would honestly spend the money and not save it so it works for me. Also, my husband owns rental properties in another state with his brother and one year we owed $2,000 because he didn't tell me one of the houses was sold and the LLC closed out so I like to have some extra paid in just in case. I never want to be in the position to owe a large amount again.

We've been there. The year we got married, my DH had filled out a W-4 for his employer, so we expected a W-2 for his income. Small business - all the paychecks he received were just printed on the computer or hand written, so no itemization. What his employer didn't tell us was that he decided to just pay him as a contract employee & we got a 1099 at the end of the year instead of a W-2. We'd just gotten married in November, so I had no idea any of this was happening. We owed $1500 in taxes as broke newlyweds - we'd just moved across the country, one of our cars had died (transmission went kaput), and we had no one local to lean on. And I couldn't even pour my heart out to my Mom because at the time you still paid for long-distance calls (I'm old, clearly.). It might as well have been $15,000. I bawled for days. Now it seems like such a small thing, but at the time it was massive. Once bitten, twice shy. I never want to feel like that again.

 

[twoolle]

We've been there. The year we got married, my DH had filled out a W-4 for his employer, so we expected a W-2 for his income. Small business - all the paychecks he received were just printed on the computer or hand written, so no itemization. What his employer didn't tell us was that he decided to just pay him as a contract employee & we got a 1099 at the end of the year instead of a W-2. We'd just gotten married in November, so I had no idea any of this was happening. We owed $1500 in taxes as broke newlyweds - we'd just moved across the country, one of our cars had died (transmission went kaput), and we had no one local to lean on. And I couldn't even pour my heart out to my Mom because at the time you still paid for long-distance calls (I'm old, clearly.). It might as well have been $15,000. I bawled for days. Now it seems like such a small thing, but at the time it was massive. Once bitten, twice shy. I never want to feel like that again.

We pay our contract workers on handwritten checks. I always worry when I hand over 1099s that they didnt save any of it for their taxes. But they know we are not taking taxes out of their checks since their check total is their gross pay (hourly wage times hours worked).

 

[kymom99]

My situation is complicated. I have a monthly teachers pension income. On that I am exempt from state taxes up to 31k. (Used to be 41k but things are not going well in our state govt right now.) Federal taxes are taken from that
I also substitute teach. When I sub a day here and there, little to no federal taxes are taken out. This is a killer. If I sub long term, making more money, then they take out more federal taxes.
My husband has one job with nothing unusual about it.
So last year we owed federal taxes. I now have extra federal withheld from the retirement check each month in the hopes that we can get back to a more break even situation.
Some may have no problem figuring out situations like mine, but I’m not one of those people. With the changes this year, I have no idea what to think.

 

[Tiggerlover91]

I JUST finished doing our taxes and was pleasantly surprised. I've used Turbox Tax for awhile now and have always been happy. We made more, had less taxes withheld (But not a whole lot less) and got a NICE refund....A LOT more than we did last year. I'm very relieved.

 

[BrerRabbit66]

My situation is complicated. I have a monthly teachers pension income. On that I am exempt from state taxes up to 31k. (Used to be 41k but things are not going well in our state govt right now.) Federal taxes are taken from that
I also substitute teach. When I sub a day here and there, little to no federal taxes are taken out. This is a killer. If I sub long term, making more money, then they take out more federal taxes.
My husband has one job with nothing unusual about it.
So last year we owed federal taxes. I now have extra federal withheld from the retirement check each month in the hopes that we can get back to a more break even situation.
Some may have no problem figuring out situations like mine, but I’m not one of those people. With the changes this year, I have no idea what to think.

Small suggestion: For your sub job, fill out a new W-4 for them and set your filing status to "Married at higher Single Rate and zero or one exemption". This will help with those short sub terms to cause taxes to actually be withheld from that check.

 

[kymom99]

Small suggestion: For your sub job, fill out a new W-4 for them and set your filing status to "Married at higher Single Rate and zero or one exemption". This will help with those short sub terms to cause taxes to actually be withheld from that check.

Thank you! I have all of them claiming zero. (I sub in 2 different districts.) I forgot to mention I did that as well after owing.

 

[DalGal]

I did my husband's last night since he only has one W2 and we file separately. Last year, he got a refund of $12 and this year he owed $24. Needless to say, we don't fund Disney trips with his refund (or mine for that matter).

 

[ashleyr409]

Just did ours this morning, we are getting a good amount this year. I will take some of the refund and fund our Summer Disney Trip. Really excited about that.

We have 2 W-2's child daycare form.

 

[secretpantssam]

I just did the Turbo Tax calculator for this year and boy did my refund go down! I usually get like $1500 but this year it's looking like $88 without changing my withholdings or anything.

 

[iivye]

I just did the Turbo Tax calculator for this year and boy did my refund go down! I usually get like $1500 but this year it's looking like $88 without changing my withholdings or anything.

When the IRS came out with the 2018 withholding tables in Jan 2018, my Fed and State withholding automatically changed (my job uses ADP) so I was paying less in than I was in the prior year even though I did not physically fill out any paperwork for the change.

 

[Brett Wyman]

We got kicked in the teeth hard! We got back 2800 last year and owe 6900 this year with little income change. Obviously not a fan of the changes. Hopefully the next administration will reverse them.

 

[mel2014]

I did ours last night and with the child care tax credit, our federal effective tax rate went down about 2% since last year. Without the child tax credit it would have been the same effective tax rate. We still owe because we deliberately under-withhold (I'd rather make interest on my money than give it to the government early) but it's consistent with past years. One "oops" is that I stopped getting tax receipts for my charitable donations (non-cash donations of goods) since I knew we wouldn't be itemizing for our federal taxes, totally forgetting that it was still to our benefit to itemize on our state taxes. So I missed out on a few hundred dollars in deductions.

 

[secretpantssam]

When the IRS came out with the 2018 withholding tables in Jan 2018, my Fed and State withholding automatically changed (my job uses ADP) so I was paying less in than I was in the prior year even though I did not physically fill out any paperwork for the change.

Maybe they did that, but I only got about $10 more in my paycheck per month so I still seem to be losing out on the deal.