seb146
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Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 7:48 pm

oopsie....

https://www.dailykos.com/stories/2019/2 ... cZW2QOmE9k

The GOP middle class tax breaks seem to be costing middle class families. Many people are upset after being told their refund would be larger, finding out they owe thanks to the Republican tax plan that was supposed to benefit the middle class.

It also looks like, according to some, that donations to non-profits are not able to be deducted as they have been in years past.
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Dutchy
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 7:53 pm

What a surprise. Republicans not looking after the middle or lower classes. Trump and the likes must be happy with their tax cuts.
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apodino
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 8:05 pm

The problem is when the tax cuts went into place the withholding tables changed accordingly and most people didn't realize it and thus ended up not having enough withheld. If people look at the actual tax on their returns they will see than the actual tax this year is lower than last year. But because less money was withheld, they end up not getting a refund and having to pay the difference. But people don't look at the actual tax payed...only the size of the refund.

In my case...my refund nearly doubled this year over last year, and my effective tax rate was less than 10 percent.
 
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trpmb6
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 8:12 pm

apodino wrote:
The problem is when the tax cuts went into place the withholding tables changed accordingly and most people didn't realize it and thus ended up not having enough withheld. If people look at the actual tax on their returns they will see than the actual tax this year is lower than last year. But because less money was withheld, they end up not getting a refund and having to pay the difference. But people don't look at the actual tax payed...only the size of the refund.

In my case...my refund nearly doubled this year over last year, and my effective tax rate was less than 10 percent.


Bingo. As I have stated on more than one occasion in the other threads on this topic. You cannot compare refunds. Doing so is actually idiotic. You have to look at tax paid vs income. Simple.

As for not having charitable donations being deductible. That's because most people are finding that the standard deduction is better than itemizing.

SHOCKING that's EXACTLY what the plan was meant to do. Simplify the tax code!

Seriously this article only proves that people don't have any clue about the taxes they pay.
 
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casinterest
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 8:24 pm

trpmb6 wrote:
apodino wrote:
The problem is when the tax cuts went into place the withholding tables changed accordingly and most people didn't realize it and thus ended up not having enough withheld. If people look at the actual tax on their returns they will see than the actual tax this year is lower than last year. But because less money was withheld, they end up not getting a refund and having to pay the difference. But people don't look at the actual tax payed...only the size of the refund.

In my case...my refund nearly doubled this year over last year, and my effective tax rate was less than 10 percent.


Bingo. As I have stated on more than one occasion in the other threads on this topic. You cannot compare refunds. Doing so is actually idiotic. You have to look at tax paid vs income. Simple.

As for not having charitable donations being deductible. That's because most people are finding that the standard deduction is better than itemizing.

SHOCKING that's EXACTLY what the plan was meant to do. Simplify the tax code!

Seriously this article only proves that people don't have any clue about the taxes they pay.



It simplified it, but it nailed a lot of people that claimed itemized deductions in excess of the new standard deduction and who have high SALT and interest deductions.

There is going to be a lot of pain in Middle Class Suburbia over the new tax plans. If you have kids, you might do well. If you are a dink or an empty nester, you are going to get screwed in some cases under these new tax plans.

With the cap on SALT, you may not clear the easy bar of the Standard deduction, and all those charity deductions are for not. If you work from home, you lost the home office write off.
There are many twists in this tax plan that hurt people that had lots of itemization.

I lost my charity deduction, home interest, and home office deductions. I wound up with the standard deduction. It also makes me wonder why I bought a house? all those tax savings apply to renters as well.


You are correct about people comparing the "refund" the Refund is based off the withholding. The real comparison is this year vs last year's taxes for comparable incomes.
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bennett123
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 8:47 pm

Do many people make large enough charitable donations for the taxation of the to be a big deal.
 
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casinterest
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 9:02 pm

bennett123 wrote:
Do many people make large enough charitable donations for the taxation of the to be a big deal.


Think of all those folks that send 5-10% of their checks to church, or other items such as schools, cancer, shelters, clothing donations.

The sweetener in the tax code for what turns out to be a much lower deduction than before ( Remember they tossed the personal exemptions) is that the tax rates were lowered).

But if you are caught where you can't claim some of your property tax or home loan interest, then you might get left with a much higher taxable income than last year as the Charitables don't help you clear the Standard deduction, and you get hosed by the higher taxes on property or home loans, or the inability to writeoff home office and other once popular deductions.
Where ever you go, there you are.
 
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trpmb6
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 9:15 pm

casinterest wrote:
bennett123 wrote:
Do many people make large enough charitable donations for the taxation of the to be a big deal.


Think of all those folks that send 5-10% of their checks to church, or other items such as schools, cancer, shelters, clothing donations.

The sweetener in the tax code for what turns out to be a much lower deduction than before ( Remember they tossed the personal exemptions) is that the tax rates were lowered).

But if you are caught where you can't claim some of your property tax or home loan interest, then you might get left with a much higher taxable income than last year as the Charitables don't help you clear the Standard deduction, and you get hosed by the higher taxes on property or home loans, or the inability to writeoff home office and other once popular deductions.



I know some catholics who give 10%, they itemize. Should still be itemizing this year as well. You're right about the SALT deduction. I guess I should be a little less .. harsh .. in my previous post. Going to be a lot of people who get boned because of SALT. But we already knew that.
 
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casinterest
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 9:37 pm

trpmb6 wrote:
casinterest wrote:
bennett123 wrote:
Do many people make large enough charitable donations for the taxation of the to be a big deal.


Think of all those folks that send 5-10% of their checks to church, or other items such as schools, cancer, shelters, clothing donations.

The sweetener in the tax code for what turns out to be a much lower deduction than before ( Remember they tossed the personal exemptions) is that the tax rates were lowered).

But if you are caught where you can't claim some of your property tax or home loan interest, then you might get left with a much higher taxable income than last year as the Charitables don't help you clear the Standard deduction, and you get hosed by the higher taxes on property or home loans, or the inability to writeoff home office and other once popular deductions.



I know some catholics who give 10%, they itemize. Should still be itemizing this year as well. You're right about the SALT deduction. I guess I should be a little less .. harsh .. in my previous post. Going to be a lot of people who get boned because of SALT. But we already knew that.

People in states with high state/City income taxes and property taxes are in trouble.

SALT has a limit of 10K. If you live in an area as a married couple and have income of 150K together. if you are in NC, then at 5.5% for 2018, you already owe 7800 in state income tax. If you own a 220,000 dollar home with a city and county property tax of 1% you just cleared the SALT limit. Other places have property taxes and income taxes well above NC, and there are earners that earn less and more than what I stated that will get hit hard.
Where ever you go, there you are.
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 10:04 pm

apodino wrote:
The problem is when the tax cuts went into place the withholding tables changed accordingly and most people didn't realize it and thus ended up not having enough withheld. If people look at the actual tax on their returns they will see than the actual tax this year is lower than last year. But because less money was withheld, they end up not getting a refund and having to pay the difference. But people don't look at the actual tax payed...only the size of the refund.

In my case...my refund nearly doubled this year over last year, and my effective tax rate was less than 10 percent.


I'm sorry, what?!

You file a W-4 with your employer to determine the number of withholding allowances. Those allowances are then used by your employer (or payroll provider) to determine the withholding amount using the withholding tables. If the incorrect amount was withheld, that's on the employer or the payroll provider but it's Payroll 101. (Of course the employee is liable, not the employer--I'm not arguing otherwise.)

Of course you can elect not to withhold anything, or to withhold certain amounts. In the case of the former, you should have a lower tax paid than you did before, other things equal. If you wanted to withhold a certain amount, well something tells me you have a tax planner or have a more than superficial understanding of how taxes work. If you didn't change the form under the new law, well, other things equal, you should have a lower tax paid than you did before. If you changed it and it went up, well then screwed up, but I think we're talking about a very small subset of taxpayers who presumably were smart enough to file the form once but somehow screwed it up when they refiled it.

Where do people come up with this nonsense?

Could the explanation possibly be that for many people taxes actually went up? TRP is kind of dancing around that dismissively, but at least he understands why.
 
KentB27
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 10:24 pm

My refund is a few hundred dollars smaller this year than it was last year, but my take home pay after taxes also increased slightly in 2018 over 2017. Overall I paid less in taxes in 2018 than I did in 2017. The tax cut did what it was supposed to do for me.

Lower taxes do not guarantee that you will get a larger refund.
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Tue Feb 05, 2019 10:36 pm

People can get caught up in semantics over refunds and taxes paid but it is entirely reasonable for the majority of Americans not to expect their refund to decrease substantially if they didn't change their withholding. If anything, take-home pay should be marginally higher and refunds should be marginally lower, other things equal.

The only possible "simple" explanation I can think of is if someone who formerly itemized now takes the much larger standard deduction because it's more favorable.

BUT that assumes that the same person adjusted their withholding before these new tax rates went into effect because they were itemizing to begin with. If they were smart enough to do that, then I fail to see why they wouldn't go it again.
 
seb146
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 12:51 am

trpmb6 wrote:
apodino wrote:
The problem is when the tax cuts went into place the withholding tables changed accordingly and most people didn't realize it and thus ended up not having enough withheld. If people look at the actual tax on their returns they will see than the actual tax this year is lower than last year. But because less money was withheld, they end up not getting a refund and having to pay the difference. But people don't look at the actual tax payed...only the size of the refund.

In my case...my refund nearly doubled this year over last year, and my effective tax rate was less than 10 percent.


Bingo. As I have stated on more than one occasion in the other threads on this topic. You cannot compare refunds. Doing so is actually idiotic. You have to look at tax paid vs income. Simple.

As for not having charitable donations being deductible. That's because most people are finding that the standard deduction is better than itemizing.

SHOCKING that's EXACTLY what the plan was meant to do. Simplify the tax code!

Seriously this article only proves that people don't have any clue about the taxes they pay.


Comparing other people's refunds, no. Comparing your own, year over year, yes. People do the exact same thing as last year and expect a larger refund or to be better off but, because politicians and the media did not explain everything (because who of us individually has time to read the tax code?) we are not better off. Unless we make a boat load of money.

Why should people give to charity, then? Look out for number one, baby! Screw people who need food and medicine! That sounds like what the end result wants to be.
You bet I'm pumped!!! I just had a green tea!!!
 
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WarRI1
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 12:52 am

I am getting my taxes done Thursday, I will let you know how I make out retired, I have never ever not received a refund in over 50 years. 21 years retired so far. I have heard complaints myself how it is not helping some who thought it would. Stay tuned.
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GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 1:10 am

Why should people give to charity, then? Look out for number one, baby! Screw people who need food and medicine! That sounds like what the end result wants to be.


Perhaps because it’s the right thing to do regardless of its tax implications. I’ve used the standard deduction for about 17 years and still give to charities.

GF
 
GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 2:17 am

The tax cut is real, those using deductions will just no longer be subsidized by those in low tax, low cost states.

GF
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 2:29 am

GalaxyFlyer wrote:
The tax cut is real, those using deductions will just no longer be subsidized by those in low tax, low cost states.

GF


What a friggin joke. Why don't you take a look at the per capita federal spending by state and see who's subsidizing whom instead of pulling things out of your arse as per usual? HINT: Mississippi ain't subsidizing California.

https://en.wikipedia.org/wiki/Federal_t ... g_by_state

And that's without even starting to look at economic output.

You so-called "conservatives" live in La La Land.
 
seb146
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 2:56 am

GalaxyFlyer wrote:
Why should people give to charity, then? Look out for number one, baby! Screw people who need food and medicine! That sounds like what the end result wants to be.


Perhaps because it’s the right thing to do regardless of its tax implications. I’ve used the standard deduction for about 17 years and still give to charities.

GF


Those same people who are teetering on the brink had been giving because they could get back. But, not anymore. And they will probably end up needing those charities that no one can afford to give to.
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GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 3:11 am

jetero wrote:
GalaxyFlyer wrote:
The tax cut is real, those using deductions will just no longer be subsidized by those in low tax, low cost states.

GF


What a friggin joke. Why don't you take a look at the per capita federal spending by state and see who's subsidizing whom instead of pulling things out of your arse as per usual? HINT: Mississippi ain't subsidizing California.

https://en.wikipedia.org/wiki/Federal_t ... g_by_state

And that's without even starting to look at economic output.

You so-called "conservatives" live in La La Land.


If Cali is subsidizing Mississippi, why don’t Cali voters stop doing so? The SALT and mortgage interest deductions are just subsidies for the wealthy, at least upper middle class which has to be paid by someone else.

GF
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 3:19 am

GalaxyFlyer wrote:
jetero wrote:
GalaxyFlyer wrote:
The tax cut is real, those using deductions will just no longer be subsidized by those in low tax, low cost states.

GF


What a friggin joke. Why don't you take a look at the per capita federal spending by state and see who's subsidizing whom instead of pulling things out of your arse as per usual? HINT: Mississippi ain't subsidizing California.

https://en.wikipedia.org/wiki/Federal_t ... g_by_state

And that's without even starting to look at economic output.

You so-called "conservatives" live in La La Land.


If Cali is subsidizing Mississippi, why don’t Cali voters stop doing so? The SALT and mortgage interest deductions are just subsidies for the wealthy, at least upper middle class which has to be paid by someone else.

GF


WTH are you suggesting? That CA secedes?!
 
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Jouhou
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 10:40 am

jetero wrote:
GalaxyFlyer wrote:
jetero wrote:

What a friggin joke. Why don't you take a look at the per capita federal spending by state and see who's subsidizing whom instead of pulling things out of your arse as per usual? HINT: Mississippi ain't subsidizing California.

https://en.wikipedia.org/wiki/Federal_t ... g_by_state

And that's without even starting to look at economic output.

You so-called "conservatives" live in La La Land.


If Cali is subsidizing Mississippi, why don’t Cali voters stop doing so? The SALT and mortgage interest deductions are just subsidies for the wealthy, at least upper middle class which has to be paid by someone else.

GF


WTH are you suggesting? That CA secedes?!


He's suggesting he's right, even when he's wrong, duh! With partisanship that strong Trump could personally rob him of all his money at gunpoint and murder his entire extended family, and he still would blame "liberals".
 
GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 3:24 pm

jetero wrote:
GalaxyFlyer wrote:
jetero wrote:

What a friggin joke. Why don't you take a look at the per capita federal spending by state and see who's subsidizing whom instead of pulling things out of your arse as per usual? HINT: Mississippi ain't subsidizing California.

https://en.wikipedia.org/wiki/Federal_t ... g_by_state

And that's without even starting to look at economic output.

You so-called "conservatives" live in La La Land.


If Cali is subsidizing Mississippi, why don’t Cali voters stop doing so? The SALT and mortgage interest deductions are just subsidies for the wealthy, at least upper middle class which has to be paid by someone else.

GF


WTH are you suggesting? That CA secedes?!


Not the worst of ideas. How about not voting in people who support crazy ideas requiring the entire tax base of the US to afford. Go local, if Cali can’t afford it, you don’t need it.


GF
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 3:27 pm

GalaxyFlyer wrote:
jetero wrote:
GalaxyFlyer wrote:

If Cali is subsidizing Mississippi, why don’t Cali voters stop doing so? The SALT and mortgage interest deductions are just subsidies for the wealthy, at least upper middle class which has to be paid by someone else.

GF


WTH are you suggesting? That CA secedes?!


Not the worst of ideas. How about not voting in people who support crazy ideas requiring the entire tax base of the US to afford. Go local, if Cali can’t afford it, you don’t need it.


GF


Er, yeah, champ, while we're at it why don't we just prevent Californians from voting?
 
GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 3:30 pm

No, just vote THIER interests without asking the other 49 states to participate in funding it. I don’t expect someone else to pay my way.

GF
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 4:47 pm

GalaxyFlyer wrote:
No, just vote THIER interests without asking the other 49 states to participate in funding it. I don’t expect someone else to pay my way.

GF


Um, yeah, sounds like you got a great grasp on how the American government works. You're only one of 325 million, buddy, sorry to bum you out.
 
Magog
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 6:11 pm

seb146 wrote:

Comparing other people's refunds, no. Comparing your own, year over year, yes. People do the exact same thing as last year and expect a larger refund or to be better off but, because politicians and the media did not explain everything (because who of us individually has time to read the tax code?) we are not better off. Unless we make a boat load of money.

All you had to do was look at your pay stub. Or your bank statement.
 
seb146
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 6:43 pm

Magog wrote:
seb146 wrote:

Comparing other people's refunds, no. Comparing your own, year over year, yes. People do the exact same thing as last year and expect a larger refund or to be better off but, because politicians and the media did not explain everything (because who of us individually has time to read the tax code?) we are not better off. Unless we make a boat load of money.

All you had to do was look at your pay stub. Or your bank statement.


We don't really have time to do that. Also, Republicans and MSM did what they always do: talk up a few positive points and leave out the negative. News had been informative many years ago, but, now, they are simply working for ratings.

People COULD go to school for a doctorate in engineering or physics, too. That does not mean they have the time or money to do it.
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einsteinboricua
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 7:02 pm

Here's a way to look at it:

If my take home pay increased and never adjusted by W-4 it means I should have paid less in taxes overall. However, comparing both last year's returns and this year's returns, my total tax actually went up (despite my dropping to a lower tax bracket). This is not exactly the way it was advertised. You would have expected that even if your salary went slightly up, there would be barely any changes (or an improvement) in the total tax based on the reform.

What am I missing? I'm not a tax expert so please help me understand, from a non-partisan point of view.
"You haven't seen a tree until you've seen its shadow from the sky."
 
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trpmb6
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 7:20 pm

einsteinboricua wrote:
Here's a way to look at it:

If my take home pay increased and never adjusted by W-4 it means I should have paid less in taxes overall. However, comparing both last year's returns and this year's returns, my total tax actually went up (despite my dropping to a lower tax bracket). This is not exactly the way it was advertised. You would have expected that even if your salary went slightly up, there would be barely any changes (or an improvement) in the total tax based on the reform.

What am I missing? I'm not a tax expert so please help me understand, from a non-partisan point of view.


It's hard to know in every person's situation.

The IRS released new W-4 witholding tables for companies to utilize earlier in the year. Companies were *supposed* to adopt those new tables and adjust the withholding for their employees accordingly. If they didn't, you would see that the taxes you paid this year compared to last year would have remained the same (assuming a constant income) or paid slightly higher this year (assuming income went up). I could see a scenario where a company may not change their withholding out of fear that their employees may end up underwithholding (though they really should be following IRS guidance). That being said, in most cases if your withholding remained constant year over year, you should see a larger return this year, for most tax filers - particularly those who in the past only used the standard deduction. Could be a few in higher taxed states with more expensive homes that get affected by the limits on those associated deductions and end up possibly getting a smaller return.

In the end only one thing matters when we are discussing this. It all comes down to what your % change in income was year over year compared to the % change in taxes owed year over year. Keep in mind that the witholding tables produced by the IRS may have resulted in someone underwitholding this year - even though they may have paid less in taxes this year. In other words, they could have only withheld 15k in taxes this year, where as they paid 17k in taxes last year, but they owe 16k this year and so it appears they get boned by the tax law because now they owe 1k in taxes upon filing. Even though they actually saw a net 1k decrease year over year. Far too many people pay attention to the check that gets paid to them at tax time instead of paying attention to the money being taken out of their pay checks each month and line 15 from form 1040. Ultimately it's the number on line 15 that matters most.
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 7:36 pm

trpmb6 wrote:
The IRS released new W-4 witholding tables for companies to utilize earlier in the year. Companies were *supposed* to adopt those new tables and adjust the withholding for their employees accordingly. If they didn't, you would see that the taxes you paid this year compared to last year would have remained the same (assuming a constant income) or paid slightly higher this year (assuming income went up).


Not "supposed to"--it's the law.

trpmb6 wrote:
I could see a scenario where a company may not change their withholding out of fear that their employees may end up underwithholding (though they really should be following IRS guidance).


WHAT?!

You're saying that companies would choose not to adopt the new withholding tables, i.e., withholding tables at lower marginal tax rates and higher deductions, out of fear employees would underwithhold?

That makes absolutely zero sense.

The only scenario I can come up with in which this is based on withholding--not the tables, those are done by simple formula!--is if someone who was itemizing before chose to withhold less on their W-4 and now with the standard deduction increasing so much it no longer makes sense to itemize. The higher standard deduction is reflected in the withholding tables. Now why they had the sense enough to follow the W-4 form instructions the first time and not the second, well that I don't understand but at the same time I don't doubt that it happened.

As difficult as it may be for some of the dismissive folks on here, the simple fact of the matter is that a large enough segment of the population is indeed paying marginally higher taxes, and for plenty of people the difference was imperceptible. That doesn't mean for many other people taxes went down.

But I have no idea why people refuse to acknowledge the fact that some people are paying higher taxes--we knew that this was going to be the case from day one. It's a minority of taxpayers, but it isn't a small number.
 
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casinterest
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 7:49 pm

jetero wrote:
trpmb6 wrote:
The IRS released new W-4 witholding tables for companies to utilize earlier in the year. Companies were *supposed* to adopt those new tables and adjust the withholding for their employees accordingly. If they didn't, you would see that the taxes you paid this year compared to last year would have remained the same (assuming a constant income) or paid slightly higher this year (assuming income went up).


Not "supposed to"--it's the law.

trpmb6 wrote:
I could see a scenario where a company may not change their withholding out of fear that their employees may end up underwithholding (though they really should be following IRS guidance).


WHAT?!

You're saying that companies would choose not to adopt the new withholding tables, i.e., withholding tables at lower marginal tax rates and higher deductions, out of fear employees would underwithhold?

That makes absolutely zero sense.

The only scenario I can come up with in which this is based on withholding--not the tables, those are done by simple formula!--is if someone who was itemizing before chose to withhold less on their W-4 and now with the standard deduction increasing so much it no longer makes sense to itemize. The higher standard deduction is reflected in the withholding tables. Now why they had the sense enough to follow the W-4 form instructions the first time and not the second, well that I don't understand but at the same time I don't doubt that it happened.

As difficult as it may be for some of the dismissive folks on here, the simple fact of the matter is that a large enough segment of the population is indeed paying marginally higher taxes, and for plenty of people the difference was imperceptible. That doesn't mean for many other people taxes went down.

But I have no idea why people refuse to acknowledge the fact that some people are paying higher taxes--we knew that this was going to be the case from day one. It's a minority of taxpayers, but it isn't a small number.


Withholding in general should be less this year. When most people will fall under the standard deduction, there is going to be less leeway to claim deductions from charitable giving, and other last minute refund boosts when filling out the taxes.

In General most will pay less in taxes. In General, the deficit between spending and revenue will increase as the spending is outpacing the revenue from taxes at this point.
Where ever you go, there you are.
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 8:06 pm

The simple point is that it ain't about withholding tables. The scenarios people are throwing about here make zero sense.

Not that I'm arguing, mind you, that taxes didn't go down for most people marginally . . . the rigid inability to fathom what we've known to be the case since the damned bill was signed, i.e., that for a whole lot of the population it didn't mean much of anything, and taxes for some would actually increase is just mind-boggling to me.

"Oh, it must be because they're looking at their refunds and not the taxes paid." Sure, OK, in some instances, maybe, but I highly doubt when you point out to people that their take-home pay increased they're like, "Oh well for me it's all about the refund!" (What I think people are refusing to acknowledge on here is that the take-home pay went up very little for plenty of people, although that doesn't jibe with "biggest middle class tax cut in history.")

"Oh, it must be because they didn't use the new withholding tables." That's absolute bollocks.

I guess the above nonsense is what must be circulating on Fox News.
 
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Dieuwer
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 8:19 pm

Personally, I tend to over-withhold, i.e. purposely paying a bit too much during the year. Especially for MA this is handy.
 
Magog
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Joined: Tue Jan 22, 2019 11:54 am

Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 8:38 pm

seb146 wrote:
Magog wrote:
seb146 wrote:

Comparing other people's refunds, no. Comparing your own, year over year, yes. People do the exact same thing as last year and expect a larger refund or to be better off but, because politicians and the media did not explain everything (because who of us individually has time to read the tax code?) we are not better off. Unless we make a boat load of money.

All you had to do was look at your pay stub. Or your bank statement.


We don't really have time to do that.

You have time to post multiple times a day on this forum but not to read your pay stub? Right... You may want to rethink your priorities.
 
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trpmb6
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 10:46 pm

As long as people keep referring to whether or not their [b]REFUND[\b] was higher this year over last year I will continue to point out that it's irrelevant. As I said, and according to Jetero it's actually the law, the IRS produced new withholding tables. So even if you didn't change your W4, your withholding changed whether you know it or not. So it is completely possible you withheld less this year - without your knowledge - and thus when you got a lower refund than before it's entirely possible you still paid less in taxes than last year - you just didn't pay as much as you thought.

Now, when people start posting that their actual taxes owed year over year increased, at a higher percentage than their income increased, I will start to acknowledge that the tax law hurt them. I even acknowledge (as I have earlier in this thread) that there will indeed be certain cases where the deduction limitations for SALT and mortgage interest will hurt folks - but those limitations are on the upper echelon of the middle class - certainly not the lower middle class and poor. The vast majority of people will see a lower tax burden this year.
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 11:03 pm

TRP I really don't believe you know how withholding tables work.

They're by formula. Cut and dried. Just like tax tables based on your filing status and your number of dependents. They should result in any taxpayer that is not itemizing or does not have atypical adjustments approximately equal to their tax liability for the year. Refunds (or payments) if the formula is used should be de minimis.

If you didn't change a simple, run-of-the-mill W-4 (i.e., what is your filing status? how many dependents do you have) and it resulted in a huge tax liability under the new rate structure, well, then you're basically saying the IRS Tax Tables are wrong, which is just bizarre.
 
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trpmb6
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Re: Middle Class Tax Cuts Not Coming

Wed Feb 06, 2019 11:51 pm

Jetero, what I am suggesting is that one can not compare year over year based on their refund because year over year the withholding tables have changed. Moreover, they changed mid tax year.

So while last year someone may have received a refund of $3000, they may have only received $2000 back this year, but their withholding for the year may have gone down more than the difference of the two refunds, such that their total tax obligation for the years went down.

I just received info from my accountant just now. I am getting a smaller refund this year than I did last year. But last year my business did not produce as much income as in previous years so I had been over paying my estimated tax payments for a good portion of the year. This year I have much more income, but i also reduced my estimated tax payments this year and yet I am still getting quite a healthy refund.

I do not have the taxes owed year over year in front of me yet, but I should be able to review that data tonight or tomorrow. Once I have some percentages I'll report on what I find.

(For my sake I hope I don't have to eat crow and admit that the tax law hurt me - we shall see! I promise to be transparent if it does not help me.)
 
GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 12:02 am

So, by limiting the SALT and mortgage interest deductions, wealthier taxpayers are the group paying more in Federal taxes while lower income taxpayers have lower rates and larger standard deduction. I thought the rich paying more was good according to Democrat’s. True, unless passed by Republicans, I guess.

GF
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 12:27 am

trpmb6 wrote:
Jetero, what I am suggesting is that one can not compare year over year based on their refund because year over year the withholding tables have changed.


Um, yeah, I get that. You've said it several times. And I'm not sure why because it makes absolutely zero sense for the reasons cited.

trpmb6 wrote:
Moreover, they changed mid tax year.


News to me. The tables were published in January 2018, granted a couple of pay periods late. Can you send a link as to when they changed after that?

https://www.irs.gov/newsroom/2018-withh ... -available

trpmb6 wrote:
So while last year someone may have received a refund of $3000, they may have only received $2000 back this year, but their withholding for the year may have gone down more than the difference of the two refunds, such that their total tax obligation for the years went down.


I really don't think you know what you're talking about.

They are FORMULA-BASED. A certain amount for each bracket plus a percentage. That percentage is the marginal tax rate for each bracket.

The prior withholding tables were similarly formula-based. That's what withholding tables are.

There should not have been wide swings in refunds--other things equal--if you were like the vast majority of wage earners and submitted a W-4 that resulted in the use of the formulas.

Again, the only way withholding would enter this is (1) if the company made a mistake; or (2) you chose on a prior W-4 to not withhold as much because you were itemizing. If you continued to choose not to withhold as much due to (2), even less would be withheld because the standard deduction increased so much. But that presumes (1) you knew enough to fill out the W-4 correctly before; and (2) you didn't do it again.

I'm not saying that didn't happen because of course it did, but I'm saying that the continued argument that this is principally attributable to withholding tables is absurd.
Last edited by jetero on Thu Feb 07, 2019 12:31 am, edited 2 times in total.
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 12:30 am

GalaxyFlyer wrote:
So, by limiting the SALT and mortgage interest deductions, wealthier taxpayers are the group paying more in Federal taxes while lower income taxpayers have lower rates and larger standard deduction. I thought the rich paying more was good according to Democrat’s. True, unless passed by Republicans, I guess.

GF


Except that's not borne by any of the statistics due to the reduction of the marginal tax brackets, but, hey, whatever floats your boat. You've repeatedly demonstrated that you have little grasp on the more complex issues.
 
seb146
Topic Author
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 12:35 am

Magog wrote:
seb146 wrote:
Magog wrote:
All you had to do was look at your pay stub. Or your bank statement.


We don't really have time to do that.

You have time to post multiple times a day on this forum but not to read your pay stub? Right... You may want to rethink your priorities.


right. because this site is all i do........
You bet I'm pumped!!! I just had a green tea!!!
 
GalaxyFlyer
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 1:14 am

jetero wrote:
GalaxyFlyer wrote:
So, by limiting the SALT and mortgage interest deductions, wealthier taxpayers are the group paying more in Federal taxes while lower income taxpayers have lower rates and larger standard deduction. I thought the rich paying more was good according to Democrat’s. True, unless passed by Republicans, I guess.

GF


Except that's not borne by any of the statistics due to the reduction of the marginal tax brackets, but, hey, whatever floats your boat. You've repeatedly demonstrated that you have little grasp on the more complex issues.


Then why all whining about SALT and mortgage limitations from wealthy taxpayers in blue states, if the 2% reduction in top marginal rates resulted in lower tax payments? They’re whining in those states BECAUSE they paying more.

GF
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 1:20 am

GalaxyFlyer wrote:
jetero wrote:
GalaxyFlyer wrote:
So, by limiting the SALT and mortgage interest deductions, wealthier taxpayers are the group paying more in Federal taxes while lower income taxpayers have lower rates and larger standard deduction. I thought the rich paying more was good according to Democrat’s. True, unless passed by Republicans, I guess.

GF


Except that's not borne by any of the statistics due to the reduction of the marginal tax brackets, but, hey, whatever floats your boat. You've repeatedly demonstrated that you have little grasp on the more complex issues.


Then why all whining about SALT and mortgage limitations from wealthy taxpayers in blue states, if the 2% reduction in top marginal rates resulted in lower tax payments? They’re whining in those states BECAUSE they paying more.

GF


GF, anyone paying more taxes is going to whine, it's not that difficult to understand. I'm telling you on average that is not the case. Especially for the wealthiest, who never got the big bang out of the SALT or mortgage limitations to begin with.

But keep the faith if you want to believe it.
 
Magog
Posts: 428
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 1:38 am

seb146 wrote:
Magog wrote:
seb146 wrote:

We don't really have time to do that.

You have time to post multiple times a day on this forum but not to read your pay stub? Right... You may want to rethink your priorities.


right. because this site is all i do........

You missed my point. If you have time to post hundreds of posts here, you have time to glance at your pay stub. But you be you, I guess. Some people are just determined to be victims.
 
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WarRI1
Posts: 12714
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 2:20 am

Dieuwer wrote:
Personally, I tend to over-withhold, i.e. purposely paying a bit too much during the year. Especially for MA this is handy.


I spent almost half of my working life in Mass. The other in R.I. I also found it convenient and wise to do the same.
It is better to die on your feet, than live on your knees.
 
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Dieuwer
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 2:25 am

I"m actually more interested in the current tax year. Mostly because my company FINALLY started offering a real, decent 401K including a generous matching. Seems that everyone suddenly signed up and started socking away...
 
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WarRI1
Posts: 12714
Joined: Thu Sep 20, 2007 10:51 am

Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 2:30 am

Dieuwer wrote:
I"m actually more interested in the current tax year. Mostly because my company FINALLY started offering a real, decent 401K including a generous matching. Seems that everyone suddenly signed up and started socking away...



Good for you, sock away plenty, you will need it.
It is better to die on your feet, than live on your knees.
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 2:55 am

Magog wrote:
seb146 wrote:
Magog wrote:
You have time to post multiple times a day on this forum but not to read your pay stub? Right... You may want to rethink your priorities.


right. because this site is all i do........

You missed my point. If you have time to post hundreds of posts here, you have time to glance at your pay stub. But you be you, I guess. Some people are just determined to be victims.


You remind me of someone on here who was quite fond of the phrase “you be you.”

(Watch the personal attacks BTW.)
 
jetero
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 2:56 am

duplicate
 
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trpmb6
Posts: 2266
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Re: Middle Class Tax Cuts Not Coming

Thu Feb 07, 2019 1:11 pm

Jetero, you are assuming that the withholding formula year over year had a proportional change such that refunds would be nearly identical year over year despite the voluminous overhaul of the tax code. That's almost impossible. The IRS is good but not *that* good. They adjusted the withholding formula/tables (in my estimation) to some best fit curves based on numerous studies of the typical household in each bracket with various exemption declarations. Probably ran samples of thousands of examples to develop the formula based on their interpretation of the changed law and prior experience.

Short of having someone from the IRS come here and tell us exactly how they developed it, what factors they used and why, we won't really know. But as far as I'm concerned it is entirely possible that the changes in the withholding formulas could account for people receiving a smaller refund year over year, yet still paying less taxes year over year on the same income.

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