Doing my 2018 taxes...Somehow I earned more but had less withheld and owe more now...

#1
So I am finally doing my taxes for year 2018 and realized that I owe a little over $600...No big deal but the oddity is that I earned more in 2018, changed nothing about my filing and I had less taxes withheld in 2018 vs 2017...and I made $12,000 more in 2018 than 2017...So essentially I owe taxes on that $12K difference in earnings. It's just puzzling that I had nearly $1200 less in taxes withheld in 2018 as I had a $400 refund in 2017...
I can't understand why LESS would be withheld when you've earned more...
 

MurphCO

Enough of this palaver
Donator
#2
My wife is a tax Nazi


So when the changes were talked about last year we started withholding more, like $100 a check, and at the end of it all we came out pretty even between state and federal


What basically happened is Trump made as close to a flat tax as we have ever had, in that the standard deduction is close to equal people’s itemized deductions to more people than it has ever been before.
 
#3
My wife is a tax Nazi


So when the changes were talked about last year we started withholding more, like $100 a check, and at the end of it all we came out pretty even between state and federal


What basically happened is Trump made as close to a flat tax as we have ever had, in that the standard deduction is close to equal people’s itemized deductions to more people than it has ever been before.
Yeah the real kicker is the $24K standardized deduction wipes out the benefit of itemized mortgage interest on the old marriage joint filing...I was trying to explain it to the Mrs...but all she wants to see is a refund even though that's actually a bad thing...I was like hey, we made $12,000 more and had less taxes withheld...if you add in the $600 we owe we're still at nearly $1,000 less taxes paid for $12,000 more in income. We come out way ahead...it's just hard for people who want to celebrate that refund check...
 

Ballbuster1

In The Danger Zone...
Wackbag Staff
#4
I made out fine. Since we paid off the mortgage the higher standard deduction
actually increased our refund. We'll both be retired by next year so I don't expect
much anymore but I won't be paying anything either.
 

MayrMeninoCrash

Liberal Psycopath
#5
I got screwed a bit for the unemployment I was paid for the first part of 2018. But I guess overall Federal was about even. For some reason I had a big bill from the State of Colorado.
 

MurphCO

Enough of this palaver
Donator
#6
Blame Polis, even if it’s not his fault, because fuck that guy
 
#7
I'm getting half as much back as I am next year. Maybe I made a little more this year, maybe it's because I'm getting my own health insurance instead of through my employer, but still... thanks for nothing, Donald.
 

Atomic Fireball

Well-Known Member
Donator
#8
I'm paying an extra $1100 because 3/4 of my family had a "non-qualified" health savings plan for six months. Thanks boy-king.
 
#9
I'd like to further clarify that this is not a BAD thing...just and odd thing..
We had nearly 12K more in gross income and $19,059 increase in taxable income...but our effective Tax rate (100/(Taxable income/tax due)) went from 16.69% to 13.66%...

I just can't understand why the IRS withholding wouldn't actually withhold enough when it's my understanding that that's the purpose of withholding with zero exemptions...

I'm paying an extra $1100 because 3/4 of my family had a "non-qualified" health savings plan for six months. Thanks boy-king.
Isn't it straight forward that you're looking at a taxable situation? I've never heard of a "non-qualified" FSA...that's the whole point of them. Was it something shady? You should know going in the taxable status of pre-tax contributions and if they go towards legit expenses...I can't even spend the money set aside on anything unless it's legit.
 
Last edited:

weeniewawa

it's a man, baby!!!
#10
I'd like to further clarify that this is not a BAD thing...just and odd thing..
We had nearly 12K more in gross income and $19,059 increase in taxable income...but our effective Tax rate (100/(Taxable income/tax due)) went from 16.69% to 13.66%...

I just can't understand why the IRS withholding wouldn't actually withhold enough when it's my understanding that that's the purpose of withholding with zero exemptions...


Isn't it straight forward that you're looking at a taxable situation? I've never heard of a "non-qualified" FSA...that's the whole point of them. Was it something shady? You should know going in the taxable status of pre-tax contributions and if they go towards legit expenses...I can't even spend the money set aside on anything unless it's legit.
You and Warren Buffets secretary have the same problem

Somehow the socialists think it is that Warren doesn't pay enough. :rolleyes::haha7:
 

Haeder

South Dakota
#11
I feel kinda bad for the people living in blue states. Some of them can't write off all of their state and local taxes anymore and they're finally realizing how much those taxes actually cost. No more socializing state and local tax expenses with federal income tax dollars. Poor blue staters.

We switched to a new accountant this year and cut our processing fees almost in half and ended up with a decent refund because one of the kids turned 18 last year so we lost a credit there but gained most of it back because of college tuition expenses this year. Talk to your accountant when your kids are 16 so you can plan ahead accordingly.
 

Sinn Fein

Infidel and White Interloper
Wackbag Staff
#12
I feel kinda bad for the people living in blue states. Some of them can't write off all of their state and local taxes anymore and they're finally realizing how much those taxes actually cost. No more socializing state and local tax expenses with federal income tax dollars. Poor blue staters.
Serves them right. They deserve what they voted for. :D

We owed $3300 this year. But, I've had more $$ in my pocket each paycheck so it was pretty much a wash. I bumped up my withholding a little which should balance things out so we don't have to write as much of a check next April.
 

BCH

Doesn't need your acknowledgement on Twitter
Wackbag Staff
#13
I feel kinda bad for the people living in blue states. Some of them can't write off all of their state and local taxes anymore and they're finally realizing how much those taxes actually cost. No more socializing state and local tax expenses with federal income tax dollars. Poor blue staters.

We switched to a new accountant this year and cut our processing fees almost in half and ended up with a decent refund because one of the kids turned 18 last year so we lost a credit there but gained most of it back because of college tuition expenses this year. Talk to your accountant when your kids are 16 so you can plan ahead accordingly.
It's not as bad as all that. I never could deduct all my local taxes anyway because AMT.
We had a significant part of our earnings taxed at 33% last year and a bunch at 28%. This year, that all fell under the 24% bracket.
All in all, my tax bill, using the standard deduction was less than last year, with more income, despite "Losing" the local taxes as a deduction.
 

Floyd1977

Registered User
#15
It's not as bad as all that. I never could deduct all my local taxes anyway because AMT.
We had a significant part of our earnings taxed at 33% last year and a bunch at 28%. This year, that all fell under the 24% bracket.
All in all, my tax bill, using the standard deduction was less than last year, with more income, despite "Losing" the local taxes as a deduction.
I’m in CT and we got about the same refund as last year. I think our federal refund went down and our state refund went up. I haven’t looked at the actual return so I don’t know if our firm just did the standard deduction this time around. I figure most people would be better off with standard deduction now.
 

DiggerNick

Well-Known Member
Donator
#16
Can I ask Americans something? Do your employers not take out your income tax when they pay you? In Australia that seems to be standard procedure. How the fuck do you get caught out owing thousands of dollars?

We also have superannuation, which is our retirement fund. Employees are obligated to pay an amount on top of your wage into your superannuation every week.

At best I may get a $400 rebate back each year.
 

ruckstande

Posts mostly from the shitter.
Donator
#17
Can I ask Americans something? Do your employers not take out your income tax when they pay you? In Australia that seems to be standard procedure. How the fuck do you get caught out owing thousands of dollars?

We also have superannuation, which is our retirement fund. Employees are obligated to pay an amount on top of your wage into your superannuation every week.

At best I may get a $400 rebate back each year.
It's up the individual. If you want to owe thousands of dollars during tax season done take anything out. If you want to get something back claim you make a ton of money with zero dependents and pay weekly. Even then you still might owe. The system isn't great. I pay extra every pay because we never seem to have enough at the end of the year.
 

Mags

LDAR, bitch.
Donator
#18
Can I ask Americans something? Do your employers not take out your income tax when they pay you? In Australia that seems to be standard procedure. How the fuck do you get caught out owing thousands of dollars?

We also have superannuation, which is our retirement fund. Employees are obligated to pay an amount on top of your wage into your superannuation every week.

At best I may get a $400 rebate back each year.
For some it’s impossible to estimate how much to have taken out of your paychecks. We both get dividend checks from stocks which vary wildly depending on the year.

Overall we paid $15,000 less in federal this year, while NYS taxes went up about 5o%. Cuomo is a cunt.
 

MayrMeninoCrash

Liberal Psycopath
#19
Can I ask Americans something? Do your employers not take out your income tax when they pay you? In Australia that seems to be standard procedure. How the fuck do you get caught out owing thousands of dollars?

We also have superannuation, which is our retirement fund. Employees are obligated to pay an amount on top of your wage into your superannuation every week.

At best I may get a $400 rebate back each year.
We fill out a W-4 form when we hire onto a new company which tells the employer our filing status (Single/married) and how many dependents/deductions we have. Based on this the employer calculates a proper withholding each pay period, which is loosely based on what your total taxes would be based on that check amount over the entire year (more gets withheld, the more you're paid each period, say if you get a bonus check or work more hours). At the end of the year everything is reconciled when you file your taxes and your total amount owed to the government has the amount withheld over the year subtracted and the difference is either still owed or refunded.
 
#20
I've had my w4 on the high side since I'd rather sit on the money than them. Hell my savings account will at least earn 1.75 (that used to be 5.25 in the 90s, sigh), that's better than them sitting on it for nothing for me.

One goof thing when I was putting all the info into TT when it came to the county property tax portion I went looking though my checking history to see what I paid for my truck. Didn't see it anywhere and recalled it was over $600 so it should have stood out. Go look at the sticker on my plate, FUCK it was due last August, whoops. Here's your money and now a $75 fine to the DMV.
 

Pigdango

Silence, you mortal Fuck!
Donator
#21
Can I ask Americans something? Do your employers not take out your income tax when they pay you? In Australia that seems to be standard procedure. How the fuck do you get caught out owing thousands of dollars?

We also have superannuation, which is our retirement fund. Employees are obligated to pay an amount on top of your wage into your superannuation every week.

At best I may get a $400 rebate back each year.
Let me take a crack at an explanation.

Our tax system is unnecessarily complicated. Every American is allowed to deduct and exempt some of their income as "Non Taxable." The W4 form that @MayrMeninoCrash mentioned only provides the employer with the basic facts of a person's situation. Are they married, which determines their filing status, and do they have kids, which determines their exemptions. There is a LOT more to our tax code than that. As @Mags said, there are also other sources of income or lost income that your employer doesn't know about when calculating the withholding.

Here's an overly simplified example:

2017:
You make 100,000 per year. Effective Federal Tax Rate is 18%. (Even our tax rates are complicated, but let's not get into that.) You have a standard deduction of $6,350 and a personal exemption of $4,050. Let's say for the sake of arguments you live in a state with no State Income Tax. So your employer believes your taxable income will be $89,600, and should withhold $16,128 from you. But let's say you own a house. You can deduct your mortgage interest and real estate taxes. Those total let's say $10,000. This itemized deduction replaces your standard deduction. Your taxable income is therefore only $85,950, and your tax liability is $15,471. You will then get a refund of $657

2018:

You make 115,000 per year. Effective Federal Tax Rate is 16.5% (THANKS, TRUMP!) You have a new standard deduction of $12,000, but no longer have your personal exemption. You also can no longer deduct your mortgage interest and property taxes, because these total $10,000. less than the standard deduction. So your employer believes your taxable income will be $103,000, and should withhold $16,995 from you. But let's say you got $4,000 in stock dividends from Disney, making your taxable income $107,000, and your tax liability $17,655. Now you owe the Feds $660.

There is a lot more to it than that. The short answer is there's a lot your employer doesn't and shouldn't know about you when calculating your withholding.
 

Badfinger

I shot the sheriff
Donator
#22
I think most people's taxes are a little lower this year, and filing the new return is a little simpler. All good things.

Where it went wrong is that the withholding tables were too low which is why so many people are writing checks this week.

We got a tax break but it doesn't feel like it.
 

MurphCO

Enough of this palaver
Donator
#23
For some it’s impossible to estimate how much to have taken out of your paychecks. We both get dividend checks from stocks which vary wildly depending on the year.

Overall we paid $15,000 less in federal this year, while NYS taxes went up about 5o%. Cuomo is a cunt.

BUT.....you are supposed to estimate nonetheless, “supposed to” is also up to you to do, penalties aren’t a big deal so not doing it isn’t really a big deal. The IRS approves two scenarios when estimating taxes

1 - Base it on what you earned the previous year and break that into 4 quarterly payments

2 - estimate as you go, what you think your year will look like and pay that into 4 quarterly payments.

America rules
 

Mags

LDAR, bitch.
Donator
#24
BUT.....you are supposed to estimate nonetheless, “supposed to” is also up to you to do, penalties aren’t a big deal so not doing it isn’t really a big deal. The IRS approves two scenarios when estimating taxes

1 - Base it on what you earned the previous year and break that into 4 quarterly payments

2 - estimate as you go, what you think your year will look like and pay that into 4 quarterly payments.

America rules
We just pay by the date. No need to make payments. Last year we wrote a check for $30k. There was no penalty or interest since we paid long before the 15th.
 

MurphCO

Enough of this palaver
Donator
#25
That could come back to bite you
 
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