Man, these stories are scaring me. I should be filing this week but I’m dreading it.
Something is trickling down. It’s just not money.
One thing to make note of is whether you had less money withheld from paychecks throughout the year. The refund at the end isn’t really very representative of what you paid in taxes overall.
You are 100% correct.
Unfortunately, to many people, all that matters is how big a refund they get on April 15 (my mom was like this - didn’t matter if she paid $500 or $50000 in taxes in a given year; if she got a refund on April 15 she was happy, and if she wrote a check she was mad). People are bad at math and logic.
Yes, and it’s about time this worked FOR us instead of against us, like it has the past few years. Let the mathless fret about their lower refunds. Some people are getting legitimately screwed while others aren’t worse off but still think they are.
Also it is compounded by people, not entirely irrationally, thinking
-I haven’t changed my deductions from previous years
-my pay hasn’t changed much
-my life situation is fairly stable
-I’ve gotten $X or close to it in a refund for the last several years
-I owe money or am getting a smaller refund this year
A few dollars on each pay check is much less noticeable than a big check at the end of the year. Even if the net effect is a push.
I understand the psychology of it, i just wish folks understood that you don’t want a refund at the end of the year. A refund means you gave the government an interest free loan all year.
The problem is that for a lot of people, that loan to the government is the only money they save all year, and if they had it during the year, they would have just spent it
That really is the crux of it - if most people got an extra $30 a paycheck (so like $700 bucks over the course of a year) they’d spend it. So they’re content getting $700 on April 15. People are bad at saving (and believe me I was this person for years and years so I’m not knocking anyone who’s in that situation).
Most people don’t understand how the marginal tax rates work either. No way will they fully realize that they may be evening out over the course of the year. Of course the GOP could have just lowered the tax rates and not messed with all the other bullshit but that wasn’t in line with their plan. Should be fun when any breaks on the individual side go away while the corporations continue to pillage the country for years to come.
And again, the GOP sold the idea that your taxes were reduced. People that saw smaller withholdings on their paychecks are going to rightfully assume that this is the tax cut in action.
What they’re not going to realize until they file their taxes is that the middle class largely got shit, and what we did get is temporary. So getting a slightly larger paycheck was expected, what they’re not going to expect is to have been paying too little all year and all of the sudden having to give that money back.
For me it is more fundamental. I set my budget on take home pay. And so for me having a little extra taken off each paycheck is preferable to writing a check at the end of the year. Net zero may be ideal, but hard to achieve in practice (especially if you get overtime pay). Ergo I’d rather side on a little extra through the year and get a check back.
I fully expect to owe an arm and a leg this year, mostly due to some life changes. I no longer have any exemptions, we closed my business (I hadn’t been paid anyway in over a year) but the final year was a money maker so I will owe on my percentage, the tax changes pretty much ended any itemizing I might do and I spent part of the year on unemployment, which is taxable.
The problem is that if you plan to not have a refund, then you have to set aside money to pay the money you will owe in the future. And it can be hard to predict how much money you will owe.
Speaking of tax returns, when will the Democrats get a hold of shitgibbon’s?
This isn’t what happened, at least for me. My paycheck went up by $12. I get 24 checks a year. I paid almost $4000 more in taxes.
H&R Block has a nice comparison for me. Taxable income and tax owed in 2017 vs 2018. My income was pretty much flat, a difference of a couple hundred dollars due to health insurance premium changes. My taxes went up.
It’s very simple, if you have kids and own a home you pay interest on, you’re paying more in taxes. That’s pretty much every working family.
I think that removal of the individual deduction fucked over folks with families, who weren’t super rich.
This is precisely Trump’s swing demographic, I believe. 100-200k families with a mortgage. Solidly middle-class, working families. The ones with “economic anxiety”. If you’re in that bracket you got your taxes raised.
So the question is what is a stronger motivator for these folks, greed or racism? Let’s hope it’s greed!
It was argued that an increase in the Child Tax Credit would offset the loss of the personal deduction for each dependent, but if your kids are still dependents but to old for Child Tax Credit, or for some other reason they don’t qualify you are royally screwed.
We can still deduct our mortgage interest, right? I haven’t done my taxes yet, but I seem to recall that the deduction was only reduced from $1M in principal, to $750k… but if you’re in a $750k house, you’re pretty well off in most housing markets.
I think the amount of Property Taxes you can deduct were limited by the new law.