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Tax check (1 Viewer)

shadyridr

shadyridr

Footballguy
Not a political thread please. Just wondering how the tax laws impacted your tax refund/bill.

Due to the tax deduction cap of $10k, my itemized deductions went down from $30k to $22k this year meaning I am taking the $24k standard deduction.

Overall impact: -$3k less refund than last year.

 
xulf said:
A refund is forced savings.. 
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The smart money move is whatever works best for you and your personality.

I tend to agree with the forced savings viewpoint.

Most people would spend more money if they have more money coming in.  

 
Walking Boot said:
Measuring the refund is meaningless.
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In a theoretical sense (or even a technical sense) this is true.

But in a practical sense - people are accustomed to spending their refund check.  If those checks are smaller - then it won't matter that the person might have been getting a bigger paycheck for the last 12 months.  What matters is that they now are not going to spend money in the economy that they otherwise would have.

 
ghostguy123 said:
The smart money move is whatever works best for you and your personality.

I tend to agree with the forced savings viewpoint.

Most people would spend more money if they have more money coming in.  
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Just a lousy 20 bucks a week more out of your paycheck adds $1040 to your refund.

 
Walking Boot said:
Measuring the refund is meaningless.

Instead, measure your total tax. Especially because the tax reform bill adjusted what you got in your paycheck weekly instead of the lump sum refund you get at the end. If you have $15000 in tax withheld, then you get a refund for $4000, is that better than having $12000 tax withheld and getting "only" a $3000 refund? Do the math. Looking at a refund is for suckers.

In fact, you should record your total gross earnings, AGI, taxable income, total tax paid, income tax, payroll tax, social security, medicare, state income tax, property tax, sales tax, and gas tax paid every year as separate lines in a spreadsheet.

You'd be surprised what your "true" tax rate is taking into account all of the above.
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I get that. That's not what I was asking though. Only about the refund.

 
Walking Boot said:
I had about $1000 in capital gains from stock trades in my taxable account in 2017. I had about $12000 in capital gains from stock trades in 2018. 

My refund is a lot less...

See the problem?
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Did the change in tax laws impact either of those numbers? Which is what I asked in my original post.

 
Again, HOW DID THE CHANGE IN TAX LAWS impact your refund? Was it a bigger impact than expected? Did you go from refund to owing? Will you be changing your withholding to account for this next year?

 
shadyridr said:
Again, HOW DID THE CHANGE IN TAX LAWS impact your refund? Was it a bigger impact than expected? Did you go from refund to owing? Will you be changing your withholding to account for this next year?
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ITS NOT THAT EASY MANY PEOPLES INCOMES VARY FROM YEAR TO YEAR. 

If you have the same income with the same deductions every year maybe... I’m in sales and own 2 businesses. My taxes are a ####### mess year to year. 

 
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Walking Boot said:
Do you not understand that your question can't be answered in this scenario?
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I am not an accountant so no I have no clue how tax laws impacted capital gains. There ARE however millions of people who's tax situation stays relatively the same year to year and can easily answer the question. It is THOSE people I am interested in hearing from.

 
Mine is complicated with multiple pass through businesses but just got back the first few business returns and it looks like I will see a very significant benefit. The new depreciation rules being a big benefit....where before we would do improvements to rental properties and have to take that expense over a long period of time where now we take it all in the year the work was done. When this goes through to my personal return the 20% of profit untaxed should provide another significant savings but we aren’t far enough along to see the exact savings but it will be big for small businesses like ours.  

 
mr roboto said:
ITS NOT THAT EASY MANY PEOPLES INCOMES VARY FROM YEAR TO YEAR. 

If you have the same income with the same deductions every year maybe... I’m in sales and own 2 businesses. My taxes are a ####### mess year to year. 
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Somebody is an angry elf (I have 30k swings yearly)

 
shadyridr said:
Again, HOW DID THE CHANGE IN TAX LAWS impact your refund? Was it a bigger impact than expected? Did you go from refund to owing? Will you be changing your withholding to account for this next year?
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What does your refund have to do with the tax laws?

If you mean how did it affect my overall tax rate?  

 
GoBirds said:
Mine is complicated with multiple pass through businesses but just got back the first few business returns and it looks like I will see a very significant benefit. The new depreciation rules being a big benefit....where before we would do improvements to rental properties and have to take that expense over a long period of time where now we take it all in the year the work was done. When this goes through to my personal return the 20% of profit untaxed should provide another significant savings but we aren’t far enough along to see the exact savings but it will be big for small businesses like ours.  
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Yeah but accelerated depreciation just forwards the savings. It doesn’t create new ones. 

 
mr roboto said:
ITS NOT THAT EASY MANY PEOPLES INCOMES VARY FROM YEAR TO YEAR. 

If you have the same income with the same deductions every year maybe... I’m in sales and own 2 businesses. My taxes are a ####### mess year to year. 
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My first year trying to do it with a business.

My CPA told me it should be straight forward and that paying her would be a waste.... :lmao:

 
mr roboto said:
Depends on the biz. 
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Pharmaceutical distribution.

Med device sales my day job.

My daily activities often overlap between the two.  She is suggesting I simply write myself an expense report to the business on a % basis of the various costs I incur for both activities.

Car, gas/mileage, phone, internet, home office, property taxes, car registration, air, hotel, meals...... I'm going through 100s of receipts and I can only imagine there is a better way.  Almost like a CPA should be doing it.  :lol:

 
mr roboto said:
Yeah but accelerated depreciation just forwards the savings. It doesn’t create new ones. 
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Which is a significant advantage for small business. Would you rather save a couple hundred a year or $10k one year and have the ability to reinvent that money? 

 
GoBirds said:
Which is a significant advantage for small business. Would you rather save a couple hundred a year or $10k one year and have the ability to reinvent that money? 
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Look I get it. I’m a biz owner. But it doesn’t create magic money. 

I can see the argument for requiring depreciation over more than one year, that’s all. 

 
mr roboto said:
Look I get it. I’m a biz owner. But it doesn’t create magic money. 

I can see the argument for requiring depreciation over more than one year, that’s all. 
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We have some items like vehicles that I believe were 5 year depreciation while other I believe were up to 40 years which you are never going to see in my lifetime. If you don’t think that is magic money then the 20% profits untaxed should check that box. 

 
To simply answer the question the way the OP asked it, my refund is 20% higher than last year. Not much has changed as far as my income or deductions.

 
GoBirds said:
We have some items like vehicles that I believe were 5 year depreciation while other I believe were up to 40 years which you are never going to see in my lifetime. If you don’t think that is magic money then the 20% profits untaxed should check that box. 
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The 20% QBI deduction is clutch around here.  I had the accountants re-run the estimates just to make sure.  I'm still a bit anxious until I see the final version.  Even though I'm a CPA as well and it makes sense, I'll be glad if the numbers end up like they appear to be today.  That also really helps cash flow wise if you are in a capital intensive business and can lower the quarterly estimated payments.

 
Shula-holic said:
The 20% QBI deduction is clutch around here.  I had the accountants re-run the estimates just to make sure.  I'm still a bit anxious until I see the final version.  Even though I'm a CPA as well and it makes sense, I'll be glad if the numbers end up like they appear to be today.  That also really helps cash flow wise if you are in a capital intensive business and can lower the quarterly estimated payments.
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I just started reviewing returns today, the 20% doesn’t apply until the pass through income shows on the personal returns right?

Getting quarterly estimated payments down will be big.....I skipped my 4th in anticipation hope I was right but if not it’s like a low interest loan w the small penalty. 

 
GoBirds said:
I just started reviewing returns today, the 20% doesn’t apply until the pass through income shows on the personal returns right?

Getting quarterly estimated payments down will be big.....I skipped my 4th in anticipation hope I was right but if not it’s like a low interest loan w the small penalty. 
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Mine is showing on the Schedule E estimate, but it's not in final version so not sure if that's accurate.  I should know but I'm pretty much a layman on filling out a return these days.  I totally skipped making the Q4 payment this year as well.  Also, got the first paycheck I've had in 3 years from the corp.  Every other one since I restructured had been 100% allocated to withholding.  With the QBI I needed to increase salary and given what we had already paid in, finally had some left over.

 
Lower tax rates basically a wash with the move from higher itemized deduction to standard deduction for me as far as total tax bill. Where I will benefit is the doubling of the child tax credit with no income phase out for my two kids. I always try to adjust my withholding for the year to keep any big nasty surprises away. I should end up paying in about $100 to the feds and getting a refund of $500 from the state largely due to a $400 state tax credit for donations to schools.

 
We got 5k back last year. We got 5k coming  this year. We made more this past year and they took approximately 1k less in taxes so for what it is worth. 

The college expenses for our daughter save our bacon and make this amount what it is. 

 
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This was the first year I tracked everything throughout the year, estimating what my tax bill and refund would be. So, not surprisingly, my refund is just about exactly what I expect it to be. It’s less than the previous year because I made adjustments during the year to account for my projections, but it’s not less because of a change to the tax laws. 

As for the tax laws, the elimination of the personal exemptions and the increase in child tax credit netted a small increase in taxes (about 1%). The new $10k limit on state income tax and property tax only changed things a much smaller percentage. I can still itemize.

My wife had some 1099 income, so I’m learning about that for the first time. Having to pay the FICA taxes on that is a hit compared previous years, but not because of the law changes. I don’t think I can deduct anything related to this work, which sucks. I haven’t filed yet, though, because I want to make sure I have that all right first.

 
Walking Boot said:
This year there is a new 20% pass through dedication she might qualify for, make sure that you check 
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Thanks. Just googled it quickly. I’m thinking the tax software is already doing this for me because my federal refund is a little different than I expected based on my calculations taking FICA taxes and the FICA deduction into account. I wasn’t sure why I was off but this looks to be in the ballpark of how far off I was. I will be sure to make sure it’s included, though. 

But my wife doesn’t really have any direct business expenses that I can deduct. I was hoping to do mileage but looks like her mileage doesn’t qualify. 

 
To actually answer the OP, SALT limit hitting here too.  I can still itemize but about $15k less in deductions.  My swing will be about $3k from a small refund to a payable.  After factoring in the increased take home I'l be worse off by a couple hundred I reckon. 

 
FED Overview - Law change means STD deduction now greater than my Itemized deduction.

  • In 2017 taxes itemized deductions were $31k and the Exemptions were another $8k.  $39k total
  • In 2018 taxes itemized deductions were $21k and the Exemptions were eliminated.  $21k total.
  • This year, STD Deduction would result in about $600 less in Federal taxes owed

    (24k-21k) * 0.22 tax rate = ~$600

[*]Overall, my FED taxes would have been about the same as last year, assuming no variation in capital gains

  • Makes sense, we are a single income, white collar family living in a high tax blue state.  The new tax law neither greatly hurts nor helps us when looking at just FED taxes.  It helps on income tax and hurts on SALT deduction.

[*]2018 withholdings:  They were ridiculously low as computed by whoever computes them.  That was obvious looking at my first paystub after the law went into effect.  I'm glad I upped my withholding manually.  A lot of people are going to be unpleasantly surprised this spring.

STATE Overview - My state requires us to use the same deductions method as we used on FED.  Stupid state.  If I use STD on FED, I have to use it on State.  STD blows up the state taxes, which I have always itemized in the past.

  • State taxes are $11.5k using the STD Deduction
  • State taxes are $10.3k using Itemized deductions, similar to last year
  • Pretty big difference of $1200


Result - I will be Itemizing, even though it will cost me $600 more on Federal, because it will save me $1200 on State.

Note - I believe that the Maryland legislature just took up a bill to decouple Deduction methods.  If they were to pass it, and if it were to take effect for the 2018 taxes, I would choose STD on the Federal and Itemized on the State.  So I'm going to hold off filing for a while.

 
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$2k more back this year.  That's not even counting the more I took home. Boom! 

 
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Took home more.   Live in NJ so I got hit by the salt cap, but probably broke even for the year  give or take a few hundred; nothing to get worked up over.  

 
I got F’ed by a couple grand. Lost about $8k in deductions so I owe more in taxes. And because they decreased my withholding the gap is even bigger. Yeah, I know I got the extra $ during the year but it’s still a kick in the nads to write a check for $4 or 5k 

 
Previous years I itemized. This year I opted for the new standard deduction. Took home the same amount and saved myself a few hours. 

 
I have to ask, how are so many of you already done with taxes? My IRAs still haven't posted the tax forms and they are consistently not released until the middle of February. I mean, folks that run businesses and whatnot, and even your average FBG, have to have at least some mutual funds and whatnot right? How do you all manage to file so early? I just checked and all my forms still aren't available.

 
DallasDMac said:
I have to ask, how are so many of you already done with taxes? My IRAs still haven't posted the tax forms and they are consistently not released until the middle of February. I mean, folks that run businesses and whatnot, and even your average FBG, have to have at least some mutual funds and whatnot right? How do you all manage to file so early? I just checked and all my forms still aren't available.
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I’m almost always filing under extension. I have 2 different K1s, aW2, 2 different 1099s and whatever my investment firms are. 

Its the K1s that take the longest. 

 
matuski said:
Pharmaceutical distribution.

Med device sales my day job.

My daily activities often overlap between the two.  She is suggesting I simply write myself an expense report to the business on a % basis of the various costs I incur for both activities.

Car, gas/mileage, phone, internet, home office, property taxes, car registration, air, hotel, meals...... I'm going through 100s of receipts and I can only imagine there is a better way.  Almost like a CPA should be doing it.  :lol:
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Try Expensify.

 
DallasDMac said:
I have to ask, how are so many of you already done with taxes? My IRAs still haven't posted the tax forms and they are consistently not released until the middle of February. I mean, folks that run businesses and whatnot, and even your average FBG, have to have at least some mutual funds and whatnot right? How do you all manage to file so early? I just checked and all my forms still aren't available.
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I was thinking the same, I’m jealous. 

 
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