ARtraveler
R.I.P. Dwayne
Happily, not all of us. For instance, mine were just comparisons with the previous two years. Most years prior, I had to pay. And most people on here are smarter than you think.
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A tax question
- Thread starter Rogue Hawk
- Start date
Easy Rider
New member
Maybe. But as time goes along, it is becoming painfully obvious that people in general are WAY more stupid than I had ever imagined.
Won't go into why......because that is way off topic.
Rogue Hawk
Active member
I changed my deduction to 0. They are withholding less. It created an allusion that we got a better cut than we actually did.
johnsimion
New member
According to Motley Fool, the tax rates have been lowered and the standard deduction has been almost doubled, but the personal exemption has been eliminated. For a married couple filing jointly in 2017, two exemptions x $4150 plus $13K standard deduction meant that $21,300 would be excluded from tax. For 2018, there would be a straight $24,000 standard deduction. Therefore if you are in this situation (as many of us are), you would actually be $2700 better off, plus presumably lower tax rates as well.
As always, you can benefit from itemizing deductions if you have more itemized deductions than the standard deduction. However, since in my example the standard deduction is now $24,000 for married filing jointly versus $13,000 last year, this means that many people will now be unable to itemize. In addition, there are more limitations on what can be itemized.
Self-employed persons with "pass-through income" (sole proprietorships, LLCs, partnerships, and S corporations) get to deduct 20% of their income off the top. Quoting Motley Fool, "In other words, if you own a small business and it generates $100,000 in profit in 2018, you'll be able to deduct $20,000 of it before the ordinary income tax rates are applied." If you are a doctor or other self-employed professional who earns a lot of money, this is huge. Any time you can deduct 20% of your income off the top, that's a huge tax break. In addition, the child tax credit now is available to persons who have up to $400,000 in income, whereas previously it phased out at $110,000. I expect sales of Mercedes-Benz and yacht sales to increase substantially.
One reason why you might get a smaller refund and/or might owe money would be the fact that the tax withholding rates were reduced last year. Withholding is NOT the same as your tax, it's just an estimate. If less money was withheld, you got more money in your paycheck during the year but of course that means your refund may be smaller when you actually file. Or you may owe, too.
https://www.fool.com/taxes/2017/12/29/your-complete-guide-to-the-2018-tax-changes.aspx
As always, you can benefit from itemizing deductions if you have more itemized deductions than the standard deduction. However, since in my example the standard deduction is now $24,000 for married filing jointly versus $13,000 last year, this means that many people will now be unable to itemize. In addition, there are more limitations on what can be itemized.
Self-employed persons with "pass-through income" (sole proprietorships, LLCs, partnerships, and S corporations) get to deduct 20% of their income off the top. Quoting Motley Fool, "In other words, if you own a small business and it generates $100,000 in profit in 2018, you'll be able to deduct $20,000 of it before the ordinary income tax rates are applied." If you are a doctor or other self-employed professional who earns a lot of money, this is huge. Any time you can deduct 20% of your income off the top, that's a huge tax break. In addition, the child tax credit now is available to persons who have up to $400,000 in income, whereas previously it phased out at $110,000. I expect sales of Mercedes-Benz and yacht sales to increase substantially.
One reason why you might get a smaller refund and/or might owe money would be the fact that the tax withholding rates were reduced last year. Withholding is NOT the same as your tax, it's just an estimate. If less money was withheld, you got more money in your paycheck during the year but of course that means your refund may be smaller when you actually file. Or you may owe, too.
https://www.fool.com/taxes/2017/12/29/your-complete-guide-to-the-2018-tax-changes.aspx
wyliec
New member
I guess you'll have to forego the new lunch box, currently.
Tango
Well-known member
People are getting less taxes taken out of their payroll check every month. That's the issue I see. And the standard deduction went up to $25,000 if you use the short form 1040. It's $26,000 if both of you are over 65. If all you deductions are less than $25,000, you are better off using the standard deduction. :dontknow: Tom :spyder:
Easy Rider
New member
Who is "we" ??
Lowering your income while increasing your deficit spending is not my definition of "doing well".
Not for an individual OR for the Government.
Easy Rider
New member
My tax preparer told me that there are no "short forms" anymore.
And since that is my wife, I am obliged to believe her. :shocked:
wyliec
New member
I don't know if I'd call it a short form; but, the 1040 is now a lot shorter with the fill ins to determine how much you owe or are owed. I'm just one of those lazy people that lets my state tax return pay what I owe on the federal; it's just a wash.
Saluda
New member
N.O.Y.B. I'll rephrase that, we did great !
Spyder_Cowgirl
GOS member (Girls On Spyders)
I am a volunteer tax preparer with the VITA - Volunteer Income Tax Assistance - program in Wichita Falls (sponsored by United Way) and the IRS really did tax preparers a favor when they changed the 1040. You see, the form itself is a single page now …. BUT, and this is a BIG BUT, there are now SIX schedules that feed the 1040. So, since tax preparers charge by the schedule / form (in general, anyway), they can now charge more to prepare even the most simple of returns. This is where programs like VITA really help those that simply cannot afford a couple hundred dollars to prepare their taxes -- we do it for free (and being in Wichita Falls, a good portion of our clients are military … many retired from Sheppard Air Force Base).
So, in general …. except for those whose itemized deductions were severely cut (like the 10K cap on property tax deductions), I am finding that MOST people really did get a tax cut. The lowered amount withheld has caught some by surprise, but as pointed out above …. it is your total tax burden vs. income year to year that really shows if you received a tax cut.
Personally, I am happy to owe a few hundred dollars as that means I had use of MY money and not the federal government (for free, they don't pay any interest on the money you get back).
All the best ….. Ann
ARtraveler
R.I.P. Dwayne
I have been using Turbo Tax for years. Just answer the questions, fill in the numbers, and it chugs the final numbers for you. $50 gets most taxes done right. You do not need to spend hundreds for a professional or pseudo professional to do it for you.
H & R Block, Jackson Hewitt (ooops we blew it), all pick up their tax "experts" from the street. They put them through a class, give them a pitch on how to increase the "take" via loans, etc. It's almost like buying a car. Buyer beware.
H & R and JH are also all computer generated. They enter and the program chugs the numbers.
H & R Block, Jackson Hewitt (ooops we blew it), all pick up their tax "experts" from the street. They put them through a class, give them a pitch on how to increase the "take" via loans, etc. It's almost like buying a car. Buyer beware.
H & R and JH are also all computer generated. They enter and the program chugs the numbers.
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Spyder_Cowgirl
GOS member (Girls On Spyders)
I have used TurboTax for several years for our own tax return -- and ours is NOT simple. We have a farm (Sched F), I have a small consulting business (Sched C), we have income from royalties (Sched E) as well as capital gains / losses from an inherited portfolio (Sched D), and up until this year itemized deductions (Sched A) - a real alphabet soup of tax forms. Still, for the most part, it is plug in the numbers and let TT do the rest. It is this complex return that is the reason the woman running the VITA program wanted me to volunteer … she has been after me for about 4 years. VITA is actually using SW developed for / by the IRS and there are some restrictions -- no farm, a cap on business income, very limited depreciation capabilities, and a few others. My biggest challenge has been dealing with unfamiliar SW; the tax return prep is not that difficult and every return is reviewed by an experienced volunteer for accuracy (some have been with the program in excess of 20 years).
So, I agree with above about certain tax preparation outfits that are in it for the money. Since VITA is all volunteer, uses "IRS" software, has a long track record of properly prepared returns, and is non-profit …. I have a high degree of confidence in the service provided (many of our clients return year after year, so they must be pleased with the service as well).
All the best …. Ann
So, I agree with above about certain tax preparation outfits that are in it for the money. Since VITA is all volunteer, uses "IRS" software, has a long track record of properly prepared returns, and is non-profit …. I have a high degree of confidence in the service provided (many of our clients return year after year, so they must be pleased with the service as well).
All the best …. Ann
Bob Denman
New member
In another word: YES!! :clap: :yes:
Easy Rider
New member
What do you do for a living ? (or did, if you are retired?)
Does the amount you charge for YOUR services constitute a "rip off" ??
johnsimion
New member
In yet another word: Maybe.
Have either of you ever seen the tax code? It's hundreds of pages long. There is a word for this: Complicated.
I get really sick and tired of people acting like complicated subjects are simple. They're NOT.
It's entirely possible for one person to get a tax cut and another NOT to get a tax cut. It depends ENTIRELY on your personal situation.
Both of you: Stop dumbing things down! One size does NOT fit all! Sheesh!
Tango
Well-known member
I needed a few forms filled out. She(local Florida) charged me $360. Last year in PA.. I had several pages of stock sales and buys. and my preparer charged me $180. My sister also in Florida, same person, paid $380. They sold their house. Why was it double in Florida for less work? :dontknow: Tom :spyder:
