Have you started taxes yet?

[Dancind]

Sounds like if you have two or more children, live in a low to moderate tax state, and don't have a large mortgage, the tax cut worked out ok for you. Grown kids, higher taxes, higher mortgage, is spelling disaster. We'll be in trouble when we move to OR I guess. Unless we're in trouble now in NM for self employment tax changes we didn't know about. I really, really hope these changes don't dampen the housing market, but I don't see how it wouldn't be affected. Many Americans have most of their net worth in their home.

Anyway, I think the people here on the DIS should be given some credit for having a brain and knowing how to make comparisons. If they say they're worse off with the tax changes, believe them. We were all told we were supposed to get a $4k break on our taxes, so the ones that weren't too worried about a little extra in their paychecks weren't being dumb. If there really was a tax break, it's reasonable to still expect a refund.

 

[smiths02]

Something else you have to keep in mind is that others prefer it that way. I'm not necessarily saying we are but we def. don't try as hard as possible to get to break even as other people. That could def. change over time though.

But I will say our Money Market account is 0.065% interest rate and our Joint Checking account is 0.045% interest rate. Heck my husband got $15.88 in interest in 2018 for his one checking account though I don't know the interest rate off hand----can we have a party now

In all seriousness the interest rates are still so dang low people have to look at it if things work out better for them in terms of their needs. Is having a little bit of money in your paystub each month better or is it easier to have it in a lump sum. Think of it as a very tiny lottery--lots of people choose the lump sum rather than 30 payments and while a large part of that is the length of time the other part is it's just easier in their minds to see it as a lump sum aspect.

All that being said for sure people can check around for accounts with higher interest rates though that normally comes with additional rules and/or fees. I know our Money Market is a higher yield one than other options but it comes with higher accumulative running account balances plus a hefty fee for 12 months of no account activity. We largely use our Money Market account for escrow shortages personally though.

I see what you are saying about preference.

However, from a purely mathematical point of view...you have to consider that overpaying the government could be more than just savings account interest. That money could have been invested in retirement over time. That money could have gone to paying down debt with a larger interest rate. Those would be much larger interest gains than the 0.065% you are speaking of

 

[smiths02]

I don't see taxes as an emotional issue - pretty logical and mathematical to me. I'm pretty capable of seeing the exact dollar amount I paid last year and the exact amount I paid this year, so I would work off the assumption that other adults who are doing their taxes are able to do the exact same thing.

This is not what I am seeing on the news. The national news was analyzing it purely based on refunds. The statistic quoted was how much refunds went down...NOT how much taxes went up or down.
This makes me think that many adults (even ones who are educated enough to produce the news) are not doing the exact same thing.

 

[Mackenzie Click-Mickelson]

I see what you are saying about preference.

However, from a purely mathematical point of view...you have to consider that overpaying the government could be more than just savings account interest. That money could have been invested in retirement over time. That money could have gone to paying down debt with a larger interest rate. Those would be much larger interest gains than the 0.065% you are speaking of

I'm speaking about the various posters around here I'm not trying to defend what I do. I don't really care much if people say I should be doing this or that but some posters (and it's not just this thread or this year it's various threads over time) are extremely insistent that what others are doing is wrong (as in how they have their withholdings) and they don't understand why they do what they do. I'm more or less commenting on various reasons why. People have to look at what works for them which may not make much sense to someone else.

Besides pure math doesn't rule people's decisions in every facet of their lives--this website wouldn't exist if it did since it's about planning trips primarily to a place most people consider quite expensive

 

[lifesavacation]

Agreed, out of control! Retirees find it difficult to live in the tri state comfortably. The Tax Reform just put the "icing on the cake" for us...headed to a no income tax state, Florida for semi retirement. Tired of shoveling snow and virtually half a year of unfavorable weather.

I think we’re going to move as well. Moving one county over will save us 2k per month. We’ll wait until Spring to put the house on the market. Now that our kids are mostly grown (dd15 going to CC next year), we don’t need a house in a good school district paid for through high property taxes.

 

[smilie]

Just out of curiosity, if the government does in fact shut down again, how will that effect refunds? My return won't even be processed until the 15th because of the credits I get.

 

[GreatLakes]

Just out of curiosity, if the government does in fact shut down again, how will that effect refunds? My return won't even be processed until the 15th because of the credits I get.

It likely depends on what they determine "essential" regarding the IRS staff. I thought the problem with the last shutdown had to do with schedules that weren't finalized and not the processing of payments/refunds. Since payments and refunds go hand in hand I can't see them stop collecting and that means also paying but who really knows.

 

[LilyWDW]

Taxes were finally approved and my refunds will be hitting my account Monday/Tuesday. So that is nice. Right before my birthday!

Is there an easy way to figure out withholdings? I am getting a promotion at the end of the month with a pretty big increase in pay and want to be sure I don't mess anything up. I want to maximize my pay checks but also don't want to owe much. Right now they are all set to 1.

Quoting myself lol.

I went to the IRS site and it looks like my best bet is to keep my withholding of 1. I will still get a refund with that, but it is low enough that I am willing to just leave it.

 

[Jennifer Quire]

Yes, I completed mine about 90% yesterday. It was all very strange.

We made about $10,000 less in 2018 over 2017. During the year, when I got my extra money in my paycheck due to the new tax law, I promptly increased my withholding. I always have to pay every year so I'm really careful to ensure that I keep upping my withholding so I don't get penalized. So on top of my usual increase, I did the second bump up of withholding once I figured out the extra I was getting.

My gross pay decreased, my taxable wages (AGI) increased over 2017, and, of course, I still owe (can't manage to get close to having them net out to zero). My effective tax rate for 2018 did go down in 2018 over 2017, so there's that, but the whole thing was perplexing.

All of my donations to charity this year were apparently not enough to exceed the standard deduction and my state taxes were disallowed so I think that's why my taxable income was increased. For instance, last year, with itemizing and using my other taxes, I had close to $38,000. This year, I only got the $24,000.

I had the saaaaame problem and now we owe $2200 :’(

 

[MillauFr]

I did ours last weekend. Looks like we'll owe $5,100 when I file.