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einsteinboricua
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Tax law judgement time

Sat Jan 19, 2019 5:37 pm

The tax cuts law is now in effect for this year's tax returns.

Leaving aside any effects in the economy (or lack of) and your paycheck, how does this year's returns look to you?

I already entered my W-2 form. I ended up itemizing since the standard deduction was too low. Oddly enough, I received a bigger refund last year and I haven't adjusted my W-4 settings because I don't know how I should set them.

Pretty much, if I'm gonna grade it by its effect, I'd give it a C since I would expect to have more money returned absent any adjustments. I still get a decent return though but that's more due to the deductions (SALT, mortgage, etc.).

What say you?
"You haven't seen a tree until you've seen its shadow from the sky."
 
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trpmb6
Posts: 1965
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Re: Tax law judgement time

Sat Jan 19, 2019 9:27 pm

einsteinboricua wrote:
The tax cuts law is now in effect for this year's tax returns.

Leaving aside any effects in the economy (or lack of) and your paycheck, how does this year's returns look to you?

I already entered my W-2 form. I ended up itemizing since the standard deduction was too low. Oddly enough, I received a bigger refund last year and I haven't adjusted my W-4 settings because I don't know how I should set them.

Pretty much, if I'm gonna grade it by its effect, I'd give it a C since I would expect to have more money returned absent any adjustments. I still get a decent return though but that's more due to the deductions (SALT, mortgage, etc.).

What say you?



Rather than comparing refunds you should compare your taxes owed numbers year over year. And compare that to your income year over year.

I won't have an idea on where I fell until probably mid february. I operate an Scorp so everything is a lot different than last year. We shall see where i ended up, but I suspect I will be better off.
 
Okie
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Re: Tax law judgement time

Sat Jan 19, 2019 10:13 pm

2018 tax payments were due Tuesday January 15th. :yuck:

Things are looking up but no Global 8000 to write off yet. :shakehead:

But I am a working on it. :bouncy:


Okie




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trpmb6
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Re: Tax law judgement time

Sat Jan 19, 2019 11:01 pm

Okie wrote:
2018 tax payments were due Tuesday January 15th. :yuck:

Things are looking up but no Global 8000 to write off yet. :shakehead:

But I am a working on it. :bouncy:


Okie




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Would love to have a jet to write off, but I dont think it would be a global. Might as well just get a BBJ at that point.

Anyways, yeah I have all my estimated tax payments in but we will see how that all falls out once I actually dig into it. Hopefully I got it right :)
 
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casinterest
Posts: 7727
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Re: Tax law judgement time

Wed Jan 23, 2019 4:33 pm

einsteinboricua wrote:
The tax cuts law is now in effect for this year's tax returns.

Leaving aside any effects in the economy (or lack of) and your paycheck, how does this year's returns look to you?

I already entered my W-2 form. I ended up itemizing since the standard deduction was too low. Oddly enough, I received a bigger refund last year and I haven't adjusted my W-4 settings because I don't know how I should set them.

Pretty much, if I'm gonna grade it by its effect, I'd give it a C since I would expect to have more money returned absent any adjustments. I still get a decent return though but that's more due to the deductions (SALT, mortgage, etc.).

What say you?


Still waiting on W-2.
Where ever you go, there you are.
 
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casinterest
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Re: Tax law judgement time

Thu Jan 31, 2019 3:36 pm

einsteinboricua wrote:
The tax cuts law is now in effect for this year's tax returns.

Leaving aside any effects in the economy (or lack of) and your paycheck, how does this year's returns look to you?

I already entered my W-2 form. I ended up itemizing since the standard deduction was too low. Oddly enough, I received a bigger refund last year and I haven't adjusted my W-4 settings because I don't know how I should set them.

Pretty much, if I'm gonna grade it by its effect, I'd give it a C since I would expect to have more money returned absent any adjustments. I still get a decent return though but that's more due to the deductions (SALT, mortgage, etc.).

What say you?



So I got everything done last night. Earliest return ever. My prediction from when the tax law went into effect came true. I got a refund due to over payment, but it was hard to predict with bonus issues and raise.

Here is my comparison with last year.

AGI went up 18K last year(most of that was the Mrs working full time,some was a nice raise for me)
Taxable income went up 30K :hissyfit: The loss of the personal exceptions hurts even with the higher standard deduction

This is offset by the lower tax rate and child deduction though
Even though Taxable Income went up by 30K,

My amount to pay in Federal taxes stayed the same as last year.
( I had to pay 9 dollars less this year in federal taxes).


It is easy for me to see that if the tax laws had stayed the same, I probably would have paid 4500-5000 more this year in taxes. So I won out on the tax law.

I had to take the standard deduction, couldn't itemize enough to clear it.

SALT limit and Mortgage interest limit were a close call for me, and I imagine they will smack some others that have expensive homes with modest incomes. Especially in areas with high state and local taxes.
Last edited by casinterest on Thu Jan 31, 2019 3:43 pm, edited 1 time in total.
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426Shadow
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Re: Tax law judgement time

Thu Jan 31, 2019 3:41 pm

I'm getting so much more back, that I didn't trust it. Almost 3 times more than last year.
Do it on three, One.....THREEEEEEE! Just got the nuts hangin out.
 
afcjets
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Re: Tax law judgement time

Thu Jan 31, 2019 3:52 pm

Wow, I didn’t realize how many people on a.net are in the top 1 percent and benefit from Trump’s tax plan for the super rich. :rotfl:
 
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trpmb6
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Re: Tax law judgement time

Thu Jan 31, 2019 3:57 pm

casinterest wrote:
Even though Taxable Income went up by 30K,

My amount to pay in Federal taxes stayed the same as last year.
( I had to pay 9 dollars less this year in federal taxes).


It is easy for me to see that if the tax laws had stayed the same, I probably would have paid 4500-5000 more this year in taxes. So I won out on the tax law.

I had to take the standard deduction, couldn't itemize enough to clear it.


I'm hoping that our two situations are fairly similar, i have a spouse who works, two children. Last year our AGI was about 30k less than what it will be this year. Being that I'm an independent contractor I have to estimate my taxes throughout the year, and this year I paid slightly less each month than I did last month in my estimated tax payments based on the large refund I received last year, projections that I would receive a larger refund by my CPA this year, and other factors.

TLDR; I anticipate that my refund will be less than what I received last year, despite income going up, but only because I reduced my estimated tax payments. In other words, I too expect my AGI to go up, but to not see a meaningful change in actual tax paid.

State taxes are a different matter. I'm almost certain, now, that I underpaid a bit. Part of this has been the changing of tax laws over the last couple of years, and my mistake in not increasing my estimated tax payments, but in large part due to the current fact that I will likely not have to itemize on federal, and state law requires you to file in the same manner as your federal return (If you don't itemize on federal you can't itemize on state). It's a stupid law and they are trying to pass a law this week to fix this and make it retroactive to 2018. If they do so, that should help me some.
 
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fr8mech
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Re: Tax law judgement time

Fri Feb 01, 2019 1:02 am

I'll tell you in April when I will finally decide that I've procrastinated long enough and start opening all these pesky envelopes that say "IMPORTANT TAX DOCUMENTS ENCLOSED".

Kidding aside (not really), my first paycheck of the year was bigger, even though I increased my HSA deduction and made a couple of post-tax deduction changes.
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casinterest
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Re: Tax law judgement time

Fri Feb 01, 2019 1:19 am

fr8mech wrote:
I'll tell you in April when I will finally decide that I've procrastinated long enough and start opening all these pesky envelopes that say "IMPORTANT TAX DOCUMENTS ENCLOSED".

Kidding aside (not really), my first paycheck of the year was bigger, even though I increased my HSA deduction and made a couple of post-tax deduction changes.


I finally decided to creep up my 401K a bit more. My site has a 1% increase per year in donations. I figure I will forget about it after awhile ::)


I put my taxes in on April 14 last year. I though I was going to have to pay. Surprise, I got a 2K back.
Where ever you go, there you are.
 
apodino
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Re: Tax law judgement time

Fri Feb 01, 2019 4:04 am

I got over double back this year than I got last year. However, there were some things this year that helped.

I adopted a daughter so I claimed an extra dependent.
I got a $7500 tax credit for buying an electric car last year.

All things being equal...I would have easily gotten more back even without the above happening.
 
apodino
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Re: Tax law judgement time

Sun Feb 03, 2019 7:55 pm

I took a closer look at my taxes this year. My effective tax rate ended up being just over 1 Percent.
 
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DL717
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Re: Tax law judgement time

Sun Feb 03, 2019 8:26 pm

LOL. What’s a refund? Hope the “fair taxes” crowd enjoys the check I’ll be sending out tomorrow.
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Dieuwer
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Re: Tax law judgement time

Sun Feb 03, 2019 9:23 pm

Isn't the "Effective Tax Rate" the best way to compare tax years?
 
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fr8mech
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Re: Tax law judgement time

Mon Feb 04, 2019 12:29 am

Dieuwer wrote:
Isn't the "Effective Tax Rate" the best way to compare tax years?


Yes, it is, but you should discard any extraordinary credits or deductions, like buying an electric car, for comparison purposes.
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DL717
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Re: Tax law judgement time

Mon Feb 04, 2019 4:15 am

I already knew I was hosed this year. We built a house, sold the old one and the new mortgage was going to be too soft. Now we know what we need in additional withholding. As for the total amount we paid? Barf.
Putting one on ignore does not squelch speech or debate, it’s quiets the noise.
 
Alias1024
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Re: Tax law judgement time

Mon Feb 04, 2019 4:45 am

Waiting on a couple 1099s still, but right now it’s looking like I’ll be sending the IRS about $2,100. Needless to say, our withholding was a little off under the new law.
It is a mistake to think you can solve any major problems with just potatoes.
 
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casinterest
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Re: Tax law judgement time

Thu Feb 07, 2019 1:05 pm

Government can shut down again. I have my refund.

Hopefully it won't
Where ever you go, there you are.
 
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trpmb6
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Re: Tax law judgement time

Sun Feb 10, 2019 10:27 pm

I just finished everything up. I owed Kansas quite a bit because of a mistake I made in my estimated payments due to changes in the tax laws that I forgot about. But that's no big deal.

On the federal we're getting about 4700 back. I didn't compare my taxes to 2017 because my income dropped off last year due to lack of contracts coming in etc. So I qualified for more deductions than I normally do due to reduced income. (for instance my dependent child care deductions were much higher that year than 2016 and 2018 - among other things.)

So I compared 2016 to 2018 because those two years were the closest in AGI. Filling jointly, both years the AGI was just under $200,000. From 2016 to 2018 income dropped 2.46%. From 2016 to 2018 taxes owed dropped 31.56% (Almost $10,000). Nearly everything is the same between those two years except that I had more qualified dependent care expenses in 2018 than 2016. My second child was born late in 2016 so i received the associated tax credits, but there was not much in the way of child care expenses that year so that wasn't a factor. That being said, that only accounts for 600 dollars in difference between 2018 and 2016.

So two things stand out to me that caused the largest change - the increase in child tax credit and being able to utilize the qualified business income deduction on the first 20% of S-Corp income. (The latter being the main heavy hitter)
 
ltbewr
Posts: 13775
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Re: Tax law judgement time

Sun Feb 10, 2019 11:38 pm

Many are seeing lower refund amounts or having to pay the IRS and state income tax agencies. Some also have higher interest, dividend or investment income, got raises, bonuses, delayed raises and the employer withholding were lower. Throw in the capping of SALT taxes, removal of individual deductions, higher standard overall deductions and it is creating some surprises that some will blame Trump for.
I will be doing, as usual, my taxes Presidents Holiday weekend with TurboTax for Fed, NY and NJ state and each have their own rules so not easy to do. I suspect I won't qualify for any medical or other deductions due to changes from last year. So long as among the Fed and 2 states I get a net refund, I'll be ok with it. Fortunately I don't need a big lump sum refund as financially in good shape with no debt.
 
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trpmb6
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Re: Tax law judgement time

Mon Feb 11, 2019 1:36 am

I'll never understand why people hope for a refund. I'd much rather pay a few dollars, or break even than receive a huge refund. It meant I screwed up throughout the year and I'm finally getting the money I should have had throughout the year back without interest. (By the way, you bet your arse they will charge you fines and interest if you underpay too much)
 
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WingsFan
Posts: 296
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Re: Tax law judgement time

Mon Feb 11, 2019 4:40 am

einsteinboricua wrote:
The tax cuts law is now in effect for this year's tax returns.

Leaving aside any effects in the economy (or lack of) and your paycheck, how does this year's returns look to you?

I already entered my W-2 form. I ended up itemizing since the standard deduction was too low. Oddly enough, I received a bigger refund last year and I haven't adjusted my W-4 settings because I don't know how I should set them.

Pretty much, if I'm gonna grade it by its effect, I'd give it a C since I would expect to have more money returned absent any adjustments. I still get a decent return though but that's more due to the deductions (SALT, mortgage, etc.).

What say you?



Judging or comparing taxes by size of the refund is a wrong way of doing it, especially in a year when tax laws were changed along with employers changing withholding. For a fair comparison, sum up the total tax paid ( state plus fed ) and compare that with what you paid last year ( assuming your income hasn't changed dramatically).

In any case, ideal refund amount should be zero.
 
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cranberrysaus
Posts: 121
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Re: Tax law judgement time

Mon Feb 11, 2019 4:53 am

Alias1024 wrote:
Waiting on a couple 1099s still, but right now it’s looking like I’ll be sending the IRS about $2,100. Needless to say, our withholding was a little off under the new law.


Ouch, did you get hit with an underpayment penalty?
 
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KICT
Posts: 655
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Re: Tax law judgement time

Mon Feb 11, 2019 7:43 am

DL717 wrote:
As for the total amount we paid? Barf.

Are you getting tired of all the winning yet?
 
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fr8mech
Posts: 7489
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Re: Tax law judgement time

Mon Feb 11, 2019 2:00 pm

cranberrysaus wrote:
Ouch, did you get hit with an underpayment penalty?


I’ve written a 5’ish thousand dollar check before without an underpayment penalty.

Of course, business and self-employed rules may be a little different.

WingsFan wrote:

Judging or comparing taxes by size of the refund is a wrong way of doing it, especially in a year when tax laws were changed along with employers changing withholding. For a fair comparison, sum up the total tax paid ( state plus fed ) and compare that with what you paid last year ( assuming your income hasn't changed dramatically).

In any case, ideal refund amount should be zero.


Using the effective tax rate is a better way to do it. Comparing nominal values may get you close, but effective tax rate is a more objective measure of comparison between years.

Barring some extraordinary event, I’m usually $500 on either side of zero, when it comes to my tax return.
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trpmb6
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Re: Tax law judgement time

Mon Feb 11, 2019 3:12 pm

fr8mech wrote:
Using the effective tax rate is a better way to do it. Comparing nominal values may get you close, but effective tax rate is a more objective measure of comparison between years.

Barring some extraordinary event, I’m usually $500 on either side of zero, when it comes to my tax return.


That's why I posted about my AGI % change and Taxes owed % change. That is the most accurate way to compare year to year.
 
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casinterest
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Re: Tax law judgement time

Mon Feb 11, 2019 3:46 pm

trpmb6 wrote:
I'll never understand why people hope for a refund. I'd much rather pay a few dollars, or break even than receive a huge refund. It meant I screwed up throughout the year and I'm finally getting the money I should have had throughout the year back without interest. (By the way, you bet your arse they will charge you fines and interest if you underpay too much)


Well, for some folks it is like enforced savings.
Currently some are expecting this lower refund rate to have an effect on the economy as the average refund is down 8.4% this year so far.

https://www.cnbc.com/2019/02/11/average ... -cuts.html

The average refund of $1,865 was 8.4 percent smaller than the average refund in the period last year.


Makes my refund look great:)
Where ever you go, there you are.
 
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trpmb6
Posts: 1965
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Re: Tax law judgement time

Mon Feb 11, 2019 3:57 pm

casinterest wrote:
trpmb6 wrote:
I'll never understand why people hope for a refund. I'd much rather pay a few dollars, or break even than receive a huge refund. It meant I screwed up throughout the year and I'm finally getting the money I should have had throughout the year back without interest. (By the way, you bet your arse they will charge you fines and interest if you underpay too much)


Well, for some folks it is like enforced savings.
Currently some are expecting this lower refund rate to have an effect on the economy as the average refund is down 8.4% this year so far.

https://www.cnbc.com/2019/02/11/average ... -cuts.html

The average refund of $1,865 was 8.4 percent smaller than the average refund in the period last year.


Makes my refund look great:)


Yeah. My refund is actually down year over year, but I made some calculations and adjusted my estimated tax payments downwards for the year. Which kind of goes back to that whole discussion that was going on last week. I wasn't exactly sure where my refund would end up (obviously I had a decent idea, but there's always a bit of unknowns up front at the beginning of the year), but I knew I would pay less in taxes year over year. I was a little surprised to get 4700 back because I had pegged the number a little closer to the 2000 mark.
 
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Dieuwer
Posts: 788
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Re: Tax law judgement time

Mon Feb 11, 2019 4:21 pm

I still didn't get all the forms I need to finish doing my taxes...Jeez.
 
GalaxyFlyer
Posts: 2213
Joined: Fri Jan 01, 2016 4:44 am

Re: Tax law judgement time

Wed Feb 13, 2019 11:49 pm

Dieuwer wrote:
I still didn't get all the forms I need to finish doing my taxes...Jeez.


They should send a bill, this is what you owe for services provided.

GF

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