Which is totally valid, IMHO. Because single policy decisions don’t exist in a vacuum. And it’s fair to believe that if every aspect of the country was run the way you want it to be run, there would be other factors, such as teeming prosperity or greater middle class financial aid ( health care and education benefits),that would offset the money you’d forgo in benefits or tax cuts. In the absence of these other factors it’s perfectly consistent to accept and even seek out access to the benefits.
My taxes are a bit complicated as I have a regular, well paying, full time job, and a full time business that I pay myself and my wife a salary. Plus I have other salaries to pay, insurance, etc…
Overall we made more money last year than the year before but paid less tax. Not a lot less, but quite noticeable when considering we made more income. Make more money, keep more. I like it!
:)
There are a number of possible factors, but we did much better this year than the last 3. Last 3, used an online program, state never withheld enough and penalized us for not paying in what we didn’t know we needed. We owed about $2000 the last 3 years between the feds and multiple states (because of moves and needing to take jobs in different states from residence).
We moved in the fall, used a tax preparation service, and except for one state (the same one that got us before) we got refunds from the feds and 3 states that are almost $2000. Our income did not change significantly from 2017 to 2018.
We don’t own a home, we have never been able to give much in charitable donations, and have nothing to itemize.
I had read that the effects of the tax reform was that paychecks would be bigger and refunds would be smaller. I didn’t see that.
Our firm actually got a potential new client because they did their taxes on Turbo Tax like they usually do and it said they owed a ton of money and they didn’t believe it. I’m not sure what became of them, but our office is certainly no less busy than it was last year when accounting for the various personnel changes we made, but because of those changes it’s hard to say. Since I’m not privy to the numbers I don’t really know if the changes added or subtracted to our business.
My personal federal refund and state payment were practically identical to what they were the year before, but that’s a mere coincidence. I didn’t look at the amount of tax year-to-year because I basically don’t care about the effects of the changes of tax law to my taxes compared to the effects of the tax law on the work I have to do.
Some things that changed that were not due to the new tax law were a number of provisions that were routinely extended year after year, but somehow Congress didn’t have the will to pass them again for 2018. The most important of these were the ability for most people to deduct mortgage insurance premiums as mortgage interest and the non-business energy credits. We’ve had a few people send us their details of the new furnace they put in, 98% efficiency, assuming the credit was still around. Nope. Unlike last year, where the provision for mortgage insurance wasn’t passed until part-way through tax season, banks have been reporting mortgage insurance premiums on their 1098s even though they aren’t deductible, simply because last year they had to reissue every single one that had mortgage insurance paid when the provision was extended. Our software still has a place to enter it just in case, but a number there doesn’t do anything.
My tax bill went up about 12% on roughly 8% more income. The limit on the state and local taxes killed me but changes to AMT helped, so I’m not paying that anymore. I actually paid less than I thought I would. I don’t mind paying morebbut I wish I were supporting effective government programs instead of paying to make people far wealthier than me pay less.
Your cynicism is warranted. I have it on good authority that it was well-known in the Department of the Treasury that the tax withholding tables would lead to relative under-withholding and smaller refunds. It’s unclear whether this was intentional in the proposed tax tables or just an accident. The administration decided not to do anything about it to make the benefits of the tax bill for workers seem larger at least through the mid-terms.
If you were paying the AMT in 2017 you weren’t using your deduction for state taxes anyway. 12% more tax on 8% income does not mean much for comparing 2017 to 2018 because the additional 8% is taxed at the highest marginal rate and has no deductions applied to it. A person with 8% higher income than another could very well have 12% or more higher tax, even when both use rules for the same year.
For a fair comparison, hold income fixed and compare the different results obtained with the 2017 and the 2018 rules. Too many examples are comparing 2017 income to 2018 income with the different rules, or comparing the amount of the refund instead of the amount of tax paid for the whole year.
I am in a high tax state, and my 2018 income results in significantly lower tax under the 2018 rules than under the 2017 rules.
They went up about $2000. Good job targeting California, dickheads.
I’d have thought you’d be happier to do your part to help out the more impoverished people and regions of the country.
Yes, of course. But if a person goes online and states they feel “complicit in the destruction of the country”, then sending the money back should assuage those guilty feelings. I consider it a bad policy, but I don’t feel guilty or complicit in the destruction of the country.
Only 17% of Americans believe they saw any positive outcome from the Tax Bill:
Technically true but I was on the bubble last year for paying AMT versus not. I think my AMT calculation was only a couple hundred bucks higher than my regular rate but I don’t have my 2017 return in front of me to tell you the exact number. I was in the AMT bracket only because I could otherwise deduct all my state and local taxes, charitable deductions, mortgage interest, etc.
That doesn’t quite work either because even with no tax law changes, the income brackets are adjusted upwards for inflation. Your calculation would tend to overstate the benefit or understate the cost of the tax bill. It would take a more detailed analysis and reveal more information than I intend to reveal to provide those figures.
California already does more than its fair share. How about you start pulling your weight?
I’m already paying a good bit more than the national average in taxes.
Is that in absolute dollars or by percentage?
Both.
I don’t know what the inflation adjustment would have been for 2018 under the old rules, but in going from 2016 to 2017 the inflation adjustment would have reduced tax on the same quantity by around 0.3%, which is far less than the savings I am seeing under the new rules.
That is an amusing article that John T linked regarding 17% of people thinking their taxes went down when in reality about 80% of them had a reduction. All that news coverage about the size of refunds must be having an effect.
It seems like many people equate their refund with how much taxes they paid. Lower refund = paid more taxes. They fail to understand how their withholdings throughout the year changed.
It’s not going to impoverished people. It’s going to rich assholes.
(Apparently including myself, though clearly I didn’t get all of his $2000.)
I finally filled and our situation is so different, I’m not sure I can actually make a comparison without redoing this year’s with last year’s numbers. Which would be a fun exercise but is unlikely.
I paid about $3,000 more for last year.
Mostly from living in California.