I work in Illinois and live in Missouri, so I get to file two states’ taxes. Normally I get a Federal refund, break even on IL, and owe MO.
Federal this year was easier, since I ended up with the standard deduction; ended up owing a few hundred $. Illinois, however, has jacked up their taxes since they’re broke, and their standard deduction for me is now $0, plus mandatory tax assessments for purchases of things where you wouldn’t pay state sales tax (such as on the internet) even though I don’t do that in Illinois since I don’t live there. Ended up owing IL quite a lot.
Usually I owe Missouri a fee of a couple bucks because I don’t bother doing estimated tax payments. But it turned out that the high IL taxes gave me such a credit that it canceled out everything I owed MO for once, so there was no fee for nonpayment of estimated taxes (because the estimated taxes were $0). Missouri’s tax forms, though, were a pain: they’d been issued before the Fed forms were done, so the instructions referenced things that ended up moved to Schedule 1, and it was an auto-calculating pdf… which seems very helpful, but Acrobat is suuuuuper slow with that, so it took about a minute for it to churn through the calculations every time I entered “$0” on a line. ugh.
I came out about a grand ahead. I’m not happy. I see it as me being made complicit in the destruction of the country.
I also see it as a signal that I’m in the upper middle class. Who knew?
The tax cut cost the US Treasury about $202 Billion this last year. Given a US population of 327 million, that means that there is effectively an IOU of $617.73 for every man woman and child. Most people, except perhaps the very well off that this tax cut was designed to benefit. Will probably find that the amount their taxes dropped (if at all) pales in comparison to the amount of additional debt that has been added in their name and that of their children.
You certainly don’t “have to”. You shared a problem you were having (“I’m not happy. I see it as me being made complicit in the destruction of the country.”) and I suggested a remedy (“send them an extra grand”). You’re free to not avail yourself of it. No harm will come of it, but I’ll be less sympathetic to your plight. I doubt my sympathies are much of a concern to you, and I’ll be surprised if your unhappiness on this matter is worth $1,000 to you to relieve, so I suspect things will remain as they are.
$5300 Federal tax last year, $1600 this year. Approx 4% increase to Total income year over year. So saved more than $3700 vs last year. They basically targeted the tax cuts to someone like me - low tax state, standard deduction last year, able to take the QBI deduction for running my own business.
Sending them $1000 wouldn’t really do it - if I wanted to entirely balance the scales I’d have to set up a recurring deposit, because it wasn’t a one-time gift. It was a deliberate and continuous routing of wealth from the poor to the rich while scraping the public coffers out on the way through.
And of course even if I did donate the difference in my takehome to some random fund or another, that still wouldn’t fix the problem. I’d have to pay for you too, and all the other rich persons who are laughing all the way to the bank at the exploding deficits. And trust me, I don’t have the kind of cash to cover that.
The solution isn’t for me to try to plug the gaping hole with my thumb. The solution is to vote out the kleptocrats and get people in who don’t consider the country and its government a piggy bank to smash open. And until I can do that, well, in another thread I mentioned how bread and circuses distract the middle class from revolutionary unrest. Such things are also effective at forgetting the negligible increase in my paychecks.
That depends on what you’re calling “the problem”. I thought the problem was you feeling complicit. If that’s the case, donating the difference could well absolve you of any feelings of complicity. If by “the problem” you mean the budget deficit, then no, of course not. Your piddly $1,000, or even a recurring deposit, is like spitting into a hurricane. Jeff Bezos could spit, and it still wouldn’t even make a dent.
I address my feelings of complicity with the teetotaler geek equivalent of getting drunk to forget. Doesn’t work as well in a thread specifically about the money the rich are incidentally handing me as a bribe to ignore the amount they’re shoveling into their own pockets.
As much as I usually disagree with HD, he has a point. If you donated the extra money you got this year, you could “refuse the bribe” and have a clear conscious. It might not make a dent is the scheme of things, but you could feel better about your actions with regards to the tax cut you received.
Finally heard back from my tax preparer today. My refund is ~$800 than last year, but I had ~$3,700 less withheld during the year, so my total tax liability is about $2,900 less than last year.
I live in a high-tax state (NY), in NYC where there is also a city income tax.
With my annual income being more or less even to the prior 5 years or so, my local and state tax burden didn’t change much.
With the change to cap the deductibility of these local taxes from my Federal tax basis, I saw a huge rise in my Fed tax basis. Bummer.
However, I saw a huge DROP in my Fed tax burden, because of the raising of the Alternative Minimum Tax.
I had previously been in the worst case scenario of being on the very low end, the bottom earning 20%, of a household income to trigger the AMT, while living in a high-cost, high-tax location. I had been paying five figures in Fed tax for years, since triggering the AMT in the early 2000s, but now actually got money back from the Fed in a refund.
**@begbert, manson1972, HD: ** It’s fair for someone to accept the tax cut and yet consider it bad policy, just like how some conservatives object to Social Security but collect it upon retirement due to having paid into it their whole careers.
I agree with you, but if they told me they felt really guilty for taking it, I’d offer them similar advice: you could always forego the money if it’ll assuage your conscience.
I’m not that unhappy. After all, not one single speck of this debacle was my fault. If I could wave a magic wand and return the taxes (and the deficit) to more sane levels I’d do it in a heartbeat, even at the small personal cost to myself, but making an impotent gesture fixes nothing. So, like I said, I just ignore it.
Which is pretty easy to do - $1000 a year is chump change when split across 26 checks. We The People were bribed pretty cheaply for our compliance with this little experiment in wealth redistribution.
I’m convinced this screw-up was a feature, not a bug. I think they got overly generous with the withholding tables so everyone would see their cut of the tax cut larceny as being larger than it was. And they knew the reckoning wouldn’t come until after the midterms.
I came out about 2 grand ahead, I think, maybe a little more. Which leads me to believe I’m not quite as upper-middle class as I thought I was. My mortgage was quite old in 2018 and I didn’t have much of an MI deduction anymore. I still have high state and local taxes, though.
But I don’t do my own taxes and I really haven’t analyzed my returns. But I know my estimated income and what I paid in various withholdings were roughly the same as 2017. And my actual income turned out to be about 3K higher once I finalized my reports ,there was a check I had neglected to enter in the register. So I was expecting to break even or owe a little bit on my federal return.
But I got back $2800 from Federal, about $800 from state ( which is typical ) and I owed New York City about $1100, which I figured means they found something new to tax. They are quite skilled at that.
My federal refund did surprise me. My accountant has a tendency to have me withhold too much so I try to keep her in check. The problem ( as I explained to her when I first noticed this ) is not that I don’t want to pay it if I owe it. But for a while I was making insanely large estimated tax payments on my year end bonuses and then I would end up getting a seven or eight thousand dollar refund. So I keep her in line and I push back if my refunds are too large. Even though the big refunds were very nice.
And I’m still not a fan of the tax cuts, I think they were a horrible idea that will negatively impact the next generation. And the extra money was really insignificant. I’m not sending anything back to government but my local food bank will probably get a hefty donation from me. It’s what I used do whenever I got an NYC property tax rebate.
After all, not one single speck of this debacle was my fault. If I could wave a magic wand and return the taxes (and the deficit) to more sane levels I’d do it in a heartbeat, even at the small personal cost to myself, but making an impotent gesture fixes nothing. So, like I said, I just ignore it.