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I'm reading more and more accounts of people getting screwed on their taxes...

Thecrensh

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#1
is this a thing? People getting less "refund" this year than they are used to?

Wasn't this a result of the Gov reducing the witholding a few years back...something that happened during the Obama admin? Correct me if I'm wrong?


 

GOLDBRIX

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#2
The Tax Tables were changed last year along with the withholding taxes. So those who work for a paycheck got more in their paychecks over the year which means less to be returned if one chooses to give Uncle Sam a free loan for the year.
While most lost certain write-offs the Automatic Deduction per person increased to counter those losses to a point.
REMEMBER: There is NO FREE LUNCH.
 

newmisty

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#3
Paying tax on labor is voluntary.
 

Cigarlover

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#4
Single moms with kids are probably doing ok. My friends has custody of his 2 kids and he got back more than he expected by about 2k.
Of all the people that posted on tweeter i am sure not 1 of them have read the tax codes and rely on someone else to do their taxes or even if they do them themselves they still haven't read the codes to even know what their liability is. It takes a special skill to even read and understand them anyway and probably less than 10% of tax attorneys understand them and even less accountants..
They should first start by finding the liability clause that makes one liable to pay an income tax. They also need to read and understand that all income derived from any source is also taxed.
Pretty straight forward yes?
Define income? Define derived? Whats the Supreme courts definition of income?

Sorry for the thread jack :)
 

GOLDBRIX

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#5
Paying tax on labor is voluntary.
Tell that to Erwin Schiff.
Died in prison on Federal Tax Evasion Charges.
.Gov would not even release him on humanitarian grounds when his health diagnosis was terminal.

Don't bet your life over tax issues.
 

newmisty

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#6
Tell that to Erwin Schiff.
Died in prison on Federal Tax Evasion Charges.
.Gov would not even release him on humanitarian grounds when his health diagnosis was terminal.

Don't bet your life over tax issues.
Irwin frequently called out the IRS then sent blank forms and re-labeled forms. That is different from not filing all together.
 

Usury

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#8
Refund from my salaried job swung from refund 4-5 thousand previous 10 years to owe 3 thousand
Yeah but how much total did you pay? Withholding + owe versus last yr withholding- refund?. With tax table updates, much less was withheld for most, so in reality they pay less even getting a smaller/no refund. Crazy they adjusted the withholding tables so steeply....almost like they wanted it to screw some up at filing, huh? Gotta love the snakes deep in the bureaucracy.
 

GOLDBRIX

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#9
Irwin frequently called out the IRS then sent blank forms and re-labeled forms. That is different from not filing all together.
enjoy your odyssey / adventure.
 

Libertaurum

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#10
"people getting screwed on their taxes..."

Isn't that redundant?

Getting a refund is like being mugged and having the mugger leave you enough change to catch a bus.

"Thank you!"
 
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tigerwillow1

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#11
People in the high tax cities and states are paying more because of the new lid on state and local tax. Most of these people are in blue hellholes and probably didn't vote for Trump anyway. For some, the higher standard deduction doesn't compensate for their loss of the personal exemptions, and they do end up paying more. A small percentage of taxpayers, but it's a genuine increase for them. It wouldn't surprise me if most of those tweets are from bogus tweet factories. The statement "I fall JUST above a tax bracket" is from somebody totally ignorant of how the brackets work. Looking at the amount of a refund or how much is owed, instead of the tax liability, is another indication of cluelessness.
 

louky

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#13
Yeah but how much total did you pay? Withholding + owe versus last yr withholding- refund?
The OP asked if differences bewteen "raw"refunds exists this year. I wasn't bothered enough to care or bitch on tweeter either, but I just looked for you and my employer took out roughly a difference of 1,000 in taxes during this year as compared to last year.

Edit, Federal took 1300 less during the year. LY refund 4000, now owe 2200.
 
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Strawboss

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#14
Irwin frequently called out the IRS then sent blank forms and re-labeled forms. That is different from not filing all together.
The smart money is to create an LLC and then simply never file any returns. Starve the beast.

I will NEVER forget that my government paid and was complicit in the bombing of a schoolbus full of children in Yemen. And is deeply involved in the "forever wars" and in surveilling US citizens illegally and a very, very long list of other infractions.

I reserve the right to protest my governments actions/policies through the refutation of taxes wherever and however possible.
 

ttazzman

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#16
I suspect it has to do with the loss of deductability of state and local taxes...this would be major in high tax states...this one thing is why the libs want to roll the tax cut back as it is a major butt kicker when they add new state taxes....obviously this severely punished people in high tax states but helps most of us in fly over country
 

edsl48

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#17
The simple answer is if you want a bigger refund just have more Federal withholding taken out of your paycheck via a new W-9 form. To get the highest refund simply have 100% of your paycheck withheld...it is as simple as that. It is a shame that the USA's tax situation confuses the public into thinking that their tax equates with their withholding,
 

Rusty Shackelford

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#18
The sheep equate refund with taxes paid...their biggest problem lies in the lack of even the most basic understanding of taxes and how they are paid and calculated.

IMO there should be no refundable tax credits past $0 tax liability...there is a penalty for not paying enough withholding taxes...there should be a penalty for withholding too much too.....way too many sob stories saying " we depend on our refund"....seriously WTF is up with that
 

Scorpio

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#19
most people, we get all of that

but louky just provided a real world example from someone who is wide awake

he has a reversed position of approx 52-6200 on a lower input of 1300

that is a very large move in one year

they did change some things, see below

but the one thing we don't have or know is a apples to apples comparison from various areas

were there any changes for x person one year to the next, ie divorce, kids no longer deductible, and so on.

it is far too easy for someone to state my taxes went up/down without the straight up year to year comparisons.

louky has shown us this is a thing, and something worth investigating further

tax changes link:
https://www.magnifymoney.com/blog/news/tax-reform-2018-explained/




1.jpg
 
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Rusty Shackelford

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#20
Louky stated his withholdings vs his refund...he really needs to state his withholdings vs his tax liability to compare the two years more accurately..

2016 vs 2017 I had more taxes taken out in 2017 but got a lower refund despite making almost the exact amount....so I must have gotten screwed right...I conveniently left out the part about losing a $1000 child tax credit due to a daughter "aging out".
 

D-FENZ

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#21
...Looking at the amount of a refund or how much is owed, instead of the tax liability, is another indication of cluelessness.
That's it right there.
People whining about the amount of their refunds vs. previous years without any other information speaks only about their ignorance and biases and says absolutely nothing about tax rates.
 

Rusty Shackelford

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#22
Scorp...

Thanks for the tax bracket image...too us at GIM it makes sense...sadly to most outside it looks like Mandarin...most will say I make $100k as a married family and will pay $22k in taxes not comprehending the standard deduction actually puts them in around $8800.

Tax illiteracy is stunning
 

louky

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#23
Louky stated his withholdings vs his refund...he really needs to state his withholdings vs his tax liability to compare the two years more accurately..

2016 vs 2017 I had more taxes taken out in 2017 but got a lower refund despite making almost the exact amount....so I must have gotten screwed right...I conveniently left out the part about losing a $1000 child tax credit due to a daughter "aging out".
Nothing changed except the fact that i had to claim standard deduction instead of itemized since the new 12,000 was greater. From talking to several people i work with in the same situation, all single, no kids, earn 90-135k, homeowners, etc, each of them swung in the same fashion. I assumed it was an employer withholding issue.
 
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<SLV>

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#24
My taxes swung about $3k in my favor vs 2017. But I’ve got 4 kids at home.
 

louky

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#25
Actually one of the people is married, but no kids, standard deductions, etc and owes 2000 verses getting a refund last year as well and everything else constant. So i don't know....

Anyway, i have no political adgenda or whatever. It makes no difference to me. What you owe is what you owe. I cut the check and didn't think twice about it until people started talking about it at work and now a thread in GIM. I do feel bad for people I know who are suddenly owing and they didn't plan for it. The married one i mentioned is always talking about being strapped for cash, has loan payments on advanced college degrees, house, cars, etc. Yep, broke on 135k salary plus bonus. SMDH.
 

Rusty Shackelford

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#26
Nothing changed except the fact that i had to claim standard deduction instead of itemized since the new 12,000 was greater. From talking to several people i work with in the same situation, all single, no kids, earn 90-135k, homeowners, etc, each of them swung in the same fashion. I assumed it was an employer withholding issue.
Tax rates went down across the board and you are claiming a higher deduction as opposed to itemized deduction with the same income....the issue is withholding.....now is that a employer computing issue or is it a nefarious deep state plot to get the populous to blame Trump by giving employers bad withholding tables?

End of the day you actual tax liability sounds as if it went down from 2017 to 2018...the manner in how it was paid was changed.

What I find confusing is how you were receiving a refund that high in previous years as a single...my wife and I with two kids are in similar income ranges (her withholding is at single rate, mine is married) would only see about a $700 return in the years before the Trump cuts...but again this illustrates a withholding difference not a tax liability difference.

It should also be noted that yes the standard went up, but you didnt get the personal exemption in 2018 which was about $3300 in 2017....but that wont change the total liability too much in the big picture
 

D-FENZ

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#27
There are lots of moving parts in figuring income taxes. To generalize based on withholdings and refunds is just absurd. One detail that escapes most is that refunds for one tax year are added to the next year's income and extra 'pay-ins' are likewise deducted.

ie. If you got a refund for the 2018, 1040 (filed in 2019) of say $1000, your income for 2019 just went up by $1000. If you had to pay in that $1000 your net just dropped by that $1000.
 

louky

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#28
On a side note, i finally decided to cut a check to pay off my house. Didn't plan on being here this long, but it's been about 9 years now. Cut an 80,000 check for the remaining balance the same month as my big fat tax bill. I also offered to analyze the married girl and her husband's finances and teach them how to manage it, but they declined so I can't feel to sorry for them. Lol
 

Rusty Shackelford

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#29
Actually one of the people is married, but no kids, standard deductions, etc and owes 2000 verses getting a refund last year as well and everything else constant. So i don't know....

Anyway, i have no political adgenda or whatever. It makes no difference to me. What you owe is what you owe. I cut the check and didn't think twice about it until people started talking about it at work and now a thread in GIM. I do feel bad for people I know who are suddenly owing and they didn't plan for it. The married one i mentioned is always talking about being strapped for cash, has loan payments on advanced college degrees, house, cars, etc. Yep, broke on 135k salary plus bonus. SMDH.
My question at this point would be along the lines of the employer withholding way too much in prior years compounded with not withholding enough now to make that big of a swing in refund potential.

But as you said what you owe is what you owe no matter the payment mechanism.
 

brosil

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#30
We expect to pay this year but we have a good CPA and it will be as little as possible.
 

Cigarlover

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#31
The estate tax was raised to over 11 million now so that should help everyone here. And if you die and you have student loans that are discharged, the good news is you will no longer have to claim the discharge as income.

At the end of the day I think we all have to just be thankful for what the government allowed us to keep. If they have the right to take 1% they have the right to take it all.
 

louky

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#32
Tax rates went down across the board and you are claiming a higher deduction as opposed to itemized deduction with the same income....the issue is withholding.....now is that a employer computing issue or is it a nefarious deep state plot to get the populous to blame Trump by giving employers bad withholding tables?

End of the day you actual tax liability sounds as if it went down from 2017 to 2018...the manner in how it was paid was changed.

What I find confusing is how you were receiving a refund that high in previous years as a single...my wife and I with two kids are in similar income ranges (her withholding is at single rate, mine is married) would only see about a $700 return in the years before the Trump cuts...but again this illustrates a withholding difference not a tax liability difference.

It should also be noted that yes the standard went up, but you didnt get the personal exemption in 2018 which was about $3300 in 2017....but that wont change the total liability too much in the big picture
Yeah, i assumed it to be an employer issue from the start, which made it surprising to hear about all the outrage on Twitter. Thought it was isolated to everyone at work bitching around the water cooler.
 

Cigarlover

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#33
There are lots of moving parts in figuring income taxes. To generalize based on withholdings and refunds is just absurd. One detail that escapes most is that refunds for one tax year are added to the next year's income and extra 'pay-ins' are likewise deducted.

ie. If you got a refund for the 2018, 1040 (filed in 2019) of say $1000, your income for 2019 just went up by $1000. If you had to pay in that $1000 your net just dropped by that $1000.
That always seemed silly to me. So if you manage your taxes correctly and you don't owe or get anything back all is well. If you give the government a loan of say 5k and get that as a tax return because you overpaid, you now have to pay tax on money that was already taxed.
 

GOLDBRIX

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#34

Rusty Shackelford

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#35
That always seemed silly to me. So if you manage your taxes correctly and you don't owe or get anything back all is well. If you give the government a loan of say 5k and get that as a tax return because you overpaid, you now have to pay tax on money that was already taxed.
It seems silly, because it is silly and not true.

Federal tax refunds are not taxable income in the following year....some state tax refunds may be though.

https://www.google.com/amp/s/www.bankrate.com/finance/taxes/claim-tax-refunds-as-income.aspx/amp/
 

GOLDBRIX

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#36
I also offered to analyze the married girl and her husband's finances and teach them how to manage it, but they declined so I can't feel to sorry for them. Lol
Most people will complain about the darkness rather than light a candle.
 

GOLDBRIX

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#37
My question at this point would be along the lines of the employer withholding way too much in prior years compounded with not withholding enough now to make that big of a swing in refund potential.
My bet is the people that take a hit this year will be going to their Human Resource / Personnel Office and submit a new withholding form for tax year 2019.

I am one who would rather get back a dime than to pay a dime but that is just me and my family unit.
 

D-FENZ

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#38
There are lots of moving parts in figuring income taxes. To generalize based on withholdings and refunds is just absurd. One detail that escapes most is that refunds for one tax year are added to the next year's income and extra 'pay-ins' are likewise deducted.

ie. If you got a refund for the 2018, 1040 (filed in 2019) of say $1000, your income for 2019 just went up by $1000. If you had to pay in that $1000 your net just dropped by that $1000.
Correction:
This post as written was misleading in implying that federal tax refunds and liabilities are figured into this equation. It is the state taxes where the refunds and pay-ins are calculated in the following year's return for the federal taxes.
In my defense, our state tax forms are also 1040s and this does apply. And yes, sometimes it is a big deal. The main gist of the post remains intact.
 

ErrosionOfAccord

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#40
Haven't done mine yet so I don't know my outcome.

I claim zero and have an extra $75 per paycheck taken out, in the past I've come close to breaking even which is the best outcome. I received a raise at the same time the taxes changed so there was some variation there. My typical bi-weekly check after the changes increased by nearly $300. 300*26=7800. One of the guys at work is in a similar situation with the exception that his wife also works with us. He was pissing and moaning that he owed $4500 this year. Assuming all things are equal he is still ahead $3300.