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Re: Lower tax refunds? Are they a problem?

Unread postPosted: Thu 28 Feb 2019, 19:09:25
by vtsnowedin
Apparently the refunds are catching up as the filing season continues.
I would be "shocked shocked I say" if we found someone was fiddling with the actual figures a bit to advance a political position.
https://www.atr.org/treasury-tax-refund ... vious-year
Tax refunds increased by 17 percent last week and are now at the same level as last year, according to Treasury Secretary Steven Mnuchin.

The left and the media have spent the past few weeks arguing that the reduction in tax refunds in the first few weeks of tax filing season meant that families are seeing a tax increase.

This is misleading and wrong. Even if an individual has a lower refund, this is not cause for a concern. A lower refund simply means that the government has been holding less of your money interest-free over the past year.

In net, the Tax Cuts and Jobs Act is a tax cut for the majority of Americans, including middle class families:

90 percent of wage earners have seen more money in their paychecks.

Taxpayers earning between $20,000 and $50,000 are seeing net federal tax cuts of 10 percent or higher according to the Joint Committee on Taxation.

91 percent of taxpayers with annual income between $64,000 and $108,000 are seeing a 2018 federal tax cut averaging $1,400 according to the left of center Institute for Taxation and Economic Policy.

A family of four with annual income of $73,000 is seeing a 60 percent reduction in federal taxes totaling more than $2,058.

According to the Heritage Foundation, the typical American family will be almost $45,000 better off over the next decade because of higher take-home pay and a stronger economy.


Re: Lower tax refunds? Are they a problem?

Unread postPosted: Sun 03 Mar 2019, 01:33:22
by vtsnowedin
Now Huffing and puffing post has that 11 million tax payers are losing 323 billion in deductions.
Let's do the math on that.
323,000,000,000 / 11,000,000 = $29,364 average deductions lost and as 10,000 is still allowed the average tax payer in this group is paying $39,364 in state and local taxes. that is a pretty hefty chunk so that average payer must be in the 35% bracket so their total tax bill rose by 35% of 29,364 or $10,277
I'm still having a hard time feeling sorry for people making enough cash to owe that kind of tax money.
https://www.huffpost.com/entry/tax-dedu ... f77651b412

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Sun 03 Mar 2019, 01:48:39
by Outcast_Searcher
vtsnowedin wrote:the average tax payer in this group is paying $39,364 in state and local taxes. that is a pretty hefty chunk

Given that I easily live on less than that, even with close to a third of that in medical costs (mostly insurance) -- (aside from income taxes and gifts), yeah, it's pretty amazing what people pay to live in fancy schmancy houses and areas, and then scream bloody murder that it's so hard to "make ends meet".

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Sun 03 Mar 2019, 09:49:51
by vtsnowedin
Here is anther tidbit of info:
According to California Franchise Tax Board, approximately 2.6 million taxpayers deducted more than the $10,000 limit in state and local taxes in 2015. Of that group, about 1 million will owe more in taxes in 2018 — to the tune of $12 billion. About $9 billion of that will be paid by about 43,000 Californians who make $1 million or more.

But some middle-class taxpayers are likely to pay more, too. According to tax board estimates, 751,000 California households with incomes under $250,000 will probably owe a combined $1.1 billion. And given the high cost of living in the state, $250,000 does not feel like nearly as much money as it does in other parts of the country.

Read more here: https://www.mcclatchydc.com/news/politi ... rylink=cpy


So number crunching .... 43,000 with yearly incomes of 1,000,000+ pay on average $209,302 more under the new tax code. sounds like tax the rich to me.
Then the ones making less then $250K that take a hit. (no word on where the cutoff line is) 1,100,000,000/751,000=$1464 each. Not a nice surprise but hardly the end of the world to somebody making say $225,000 a year.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Sun 03 Mar 2019, 20:40:40
by Outcast_Searcher
vtsnowedin wrote:Here is anther tidbit of info:
According to California Franchise Tax Board, approximately 2.6 million taxpayers deducted more than the $10,000 limit in state and local taxes in 2015. Of that group, about 1 million will owe more in taxes in 2018 — to the tune of $12 billion. About $9 billion of that will be paid by about 43,000 Californians who make $1 million or more.

But some middle-class taxpayers are likely to pay more, too. According to tax board estimates, 751,000 California households with incomes under $250,000 will probably owe a combined $1.1 billion. And given the high cost of living in the state, $250,000 does not feel like nearly as much money as it does in other parts of the country.

Last I checked, no one was forced to live in high tax states and/or cities. Or buy huge houses with high taxes.

But does seem to severely challenge the liberal assertion that this tax change is almost all about helping the rich and screwing the poor. Now they'll need to find something else to jingle their keys at.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 10:11:40
by vtsnowedin
Next Monday is tax day.
Has everybody got their taxes done? :)
How did you make out? :?:
The media is still beating the story about how people "really didn't get a tax cut"
One story yesterday had a young couple with a new baby that
1. Did not get a refund
2. She has to return to work sooner then planned because they don't have said refund.
3. Can no longer deduct the cost of uniforms etc.
4. Are having to sell their car to cover the bills.
All very photogenic (cute baby and all) but the reporter could not be bothered to research their last years tax return and compare it with this years to see the true bottom line.
We should make reporters swear to tell the truth, THE WHOLE TRUTH, and nothing but the truth.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 10:24:12
by GoghGoner
I have to come up with a couple of thousand $$$ for the IRS that I wasn't expecting this year. Waiting until the last minute to file. Luckily, we have the money available. We have always itemized and the standard deduction is now on par with that, however, somebody had the great idea to reduce withholding last year and now instead of being close to even, we got caught by the extra bill. So, in effect, I suppose we didn't get a tax reduction. What a stupid PITA.

Our HR department sent out an email so folks could modify their W4s. Might have a knockdown effect on the entire economy.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 11:10:39
by vtsnowedin
GoghGoner wrote: So, in effect, I suppose we didn't get a tax reduction. What a stupid PITA.

No the true bottom line is what percentage of gross income you paid in total this year compared to last, not how much you over or under withheld during the year.
Our HR department sent out an email so folks could modify their W4s. Might have a knockdown effect on the entire economy.

They waited until now to do that? Competent bunch aren't they.
It might have a temporary effect as many adjust their withholding all at the same time but over the whole year and going forward the total being collected by the IRS should be less and that should pump up the economy.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 11:55:36
by vtsnowedin
As an example for those who dare not tread in their tax forms to see if you won or lost.
Pull up your 2017 tax return (you keep it on file like you are supposed to right?)and pick off "total income" from line 15 . For this example lets say you and your spouse made $75,000. Then go to line 39 "total tax" and see that you paid $9,500. Then divide 9500/75,000 you paid 12.67% of your total income that year before the law changed.
Now go to the forms you filed for this 2018 year (or are about to file). Of course the forms have changed and you income is different so you go to line 6 for total income and you did pretty good with income of $83,000 and line 15 "Total tax" is $9,600. Do the math 9600/83,000 and your tax rate is $11.57% so you got a cut. If the law had not changed you would have paid 12.67% of 83,000 or $10,516 so your cut was $960.
I won't ask anyone to show their actual figure and those are not mine but do your own math and tell us the final percentages before and after to see what the real effect is for average people. (I know we are all above average like lake Woebegone) :)

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 14:09:26
by Outcast_Searcher
GoghGoner wrote:I have to come up with a couple of thousand $$$ for the IRS that I wasn't expecting this year. Waiting until the last minute to file. Luckily, we have the money available. We have always itemized and the standard deduction is now on par with that, however, somebody had the great idea to reduce withholding last year and now instead of being close to even, we got caught by the extra bill. So, in effect, I suppose we didn't get a tax reduction. What a stupid PITA.

Our HR department sent out an email so folks could modify their W4s. Might have a knockdown effect on the entire economy.

According to articles I've read, people ignoring the notification to modify their deductions LAST year is at the core of most of the "problem". Now, how well the message got out by the IRS, by the media, by the companies, I have no idea, since I don't watch TV and I don't work now.

Now that there's been a kerfluffle over deductions, hopefully the message will be better disseminated this year AND workers will pay more attention re modifying their deductions.

Overall, no matter how many times TPTB claim to "simplify" federal income taxes, the more of a mess it gets to be overall. Whenever the laws change a lot, I'm always glad I have a preparer now to worry about the details, so I don't have to.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 14:13:20
by Outcast_Searcher
vtsnowedin wrote:
GoghGoner wrote: So, in effect, I suppose we didn't get a tax reduction. What a stupid PITA.

No the true bottom line is what percentage of gross income you paid in total this year compared to last, not how much you over or under withheld during the year.
Our HR department sent out an email so folks could modify their W4s. Might have a knockdown effect on the entire economy.

They waited until now to do that? Competent bunch aren't they.
It might have a temporary effect as many adjust their withholding all at the same time but over the whole year and going forward the total being collected by the IRS should be less and that should pump up the economy.

I'm confused. If the complaint by the masses is that they are now having to pay at tax time and they don't like that / can't "afford" that -- then the remedy would be to RAISE their withholding. So this would be a temporary drag on the economy.

Obviously situations will vary, but isn't that the overall issue? What am I missing?

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 16:04:27
by GoghGoner
vtsnowedin wrote:
GoghGoner wrote: So, in effect, I suppose we didn't get a tax reduction. What a stupid PITA.

No the true bottom line is what percentage of gross income you paid in total this year compared to last, not how much you over or under withheld during the year.


Well, some folks have to pay more taxes now than they did last year. There were many itemized deductions that were eliminated/reduced last year. I am close to breaking even.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 16:09:50
by ROCKMAN
Outcast - I'm with you. Can't believe this thread is still active. If folks screwed up not understanding how with holding works then THEY f*cked themselves...no one else. Very simple: put zero deductions and go with max withholding. That way they get a ice refund when the govt gives them back their own money.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 17:21:28
by vtsnowedin
GoghGoner wrote:
vtsnowedin wrote:
GoghGoner wrote: So, in effect, I suppose we didn't get a tax reduction. What a stupid PITA.

No the true bottom line is what percentage of gross income you paid in total this year compared to last, not how much you over or under withheld during the year.


Well, some folks have to pay more taxes now than they did last year. There were many itemized deductions that were eliminated/reduced last year. I am close to breaking even.
I realize that It varies from person to person and state to state. I have a hard time feeling sorry for someone that is paying more then $10,000 in state and local income taxes and I don't know why a nurse should be able to deduct the cost of her uniforms. After all I had to show up for work every day in "suitable" clothes that I paid for out of pocket with post tax dollars, why should they great a break. And some poor schmuck can no longer deduct the interest on the portion of his mortgage over $750,000? Why should I be subsidizing his Mc Mansion. If he wants to pay more then say $400K for a house which is all anyone would really need the portion over 400 should be paid for in cash.
I'm waiting for someone in the 50 to 65 K range to chime in with their numbers to see what more average guys came out with as that is the vast majority of tax payers.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Tue 09 Apr 2019, 17:41:17
by vtsnowedin
If I read it right one group that is taking a hit are parents of kids over 17 that are not full time students if the parents make more then $54,884 a year. They are in their rooms playing video games and eating you out of house and home and you can't deduct a penny of those expenses.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Wed 10 Apr 2019, 08:01:26
by GoghGoner
ROCKMAN wrote:Outcast - I'm with you. Can't believe this thread is still active. If folks screwed up not understanding how with holding works then THEY f*cked themselves...no one else. Very simple: put zero deductions and go with max withholding. That way they get a ice refund when the govt gives them back their own money.


This was a major change to the tax code. This change eliminates most itemized filings. I didn't realize it until we did our taxes this year. Most of the the time what the federal government does has very little effect on my life so I ignore it to focus elsewhere.

Logically, I claim the right exemptions but I owe much more money based on those exemptions. I just decreased my exemptions to zero and the withholding is still not enough.This is very messed up at the federal level.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Wed 10 Apr 2019, 08:08:33
by vtsnowedin
I expect this thread to die about April 20th when everybody has done their taxes and had their say about it.
GoghGoner your saying you owe "much more money" doesn't tell us much if you don't do the math and state it in percent of gross income as in my example above.

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Thu 25 Apr 2019, 13:07:12
by Outcast_Searcher
The IRS summary data is in, so we can look at the data instead of speculate or listen to political opinions of "experts" in the news.

So any difference is mostly noise, even with so many taxpayers failing to adjust their withholding.
The final stats are in from the IRS — and it looks like the average tax refund check isn’t all that different from last year.

The average refund check for the week ending April 19 was $2,725, according to the tax agency. That’s down 2% from a year ago.


https://www.cnbc.com/2019/04/25/the-irs ... -year.html

Re: Lower tax refunds? Are they a problem?

Unread postPosted: Thu 25 Apr 2019, 17:34:15
by Cog
So essentially most people got more money in their bi-monthly paychecks and still got about the same refund as the year before the tax cut. Sounds like a win to me.