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Thread: I owe how much? Americans shocked by impact of new tax law

  1. #1

    Exclamation I owe how much? Americans shocked by impact of new tax law

    Ha!, That's only a tiny percentage of what you really owe, assenholes.

    You wanted, you voted for, a $22 TRILLION dollar spending orgy which will never be paid off.

    Government owns your children now because of it.



    I owe how much? Americans shocked by impact of new tax law

    https://www.apnews.com/57ac6498374944f7bfb20660630c95f4

    By SARAH SKIDMORE SELL

    Wait, I owe the IRS?

    The first tax filing season under the new federal tax law is proving to be surprising, confusing — and occasionally frightening — for some Americans, especially those accustomed to getting money back from the government.

    Take Andy Kraft and Amy Elias of Portland, Oregon. The couple had grown comfortable getting a small refund each year, a few hundred dollars or more. Then they found out they owe $10,160 this year.

    “I will never forget the moment, I thought ‘We look good’ and then we added in the next W-2 and my jaw hit the floor,” Kraft said. “There was no way I wanted to believe that what I was looking at was accurate.”

    President Trump promised a reduction in taxes with the new law. And by most measures, the majority of Americans will see one. The nonpartisan Tax Policy Center projected the tax law would reduce individual income taxes by about $1,260 on average, although it benefits higher earners more.

    Some people already saw the benefit in the form of bigger paychecks. That’s because the law forced employers to change what they withheld. But the system is far from perfect, and many workers didn’t have enough in taxes set aside. Now, the IRS wants that money.

    In addition, the law also eliminated personal exemptions, increased child credits, limited popular deductions and generally upended many familiar practices that determine what happens at tax time. That has taxpayers feeling a bit unmoored.

    “We were very comfortable with our tax law, it had basically been there since 1986, suddenly all these things that were very important to people changed ... it’s all different,” said Howard Gleckman, a senior fellow at the Tax Policy Center.

    Kraft and Elias are able to pay their tax bill but he’s still stunned. He even tried to reverse-engineer things to figure out where they went wrong, diving into page after page of IRS rules. He painstakingly put together all the numbers. The couple ultimately asked a CPA to verify the figures they were seeing on TurboTax. Crushingly, they were correct.

    The couple’s effective tax rate was lower, but they still owed the government.

    “I feel like I have reached a stage of grief of acceptance,” he said. “In a twisted way I should have been paying this all year and now I just have to pay it in one lump sum.”

    A number of experts such as Gleckman are urging taxpayers to obsess less about their refund or what they owe when measuring the effect of the new tax law. These are just a sliver of your tax picture.

    But the truth is, many Americans have come to rely on refunds. About three-quarters of U.S. taxpayers typically get one and they had averaged around $2,800. For some low-income households it is the biggest cash infusion of the year.

    The IRS reported Thursday that the average tax refund as of the second week of filing season was $1,949, down 8.7 percent from the year earlier. The total number of refunds is down 16 percent.

    Experts caution it is too early to draw conclusions about a tax season that ends in April. Plus, the number of returns — 27 million as of Feb. 8 — is down 10 percent from a year ago, due in part to the partial government shutdown. The picture will become much clearer as more filings are processed, refunds are issued and the IRS gets back up to full speed.

    All the same, the initial results have surprised early filers and worried those who haven’t yet tackled their taxes.

    Part of the problem centers around how employees and employers adjusted (or didn’t adjust) withholdings from paychecks to account for the law’s changes. The government issued updated withholding guidelines to help employers determine how much to set aside from an employee’s paycheck to cover taxes. Withhold too much and you get a refund at tax time; too little and you owe.

    It is at best, an estimate. But it’s an estimate that grew drastically more difficult to make under the new law.

    The Government Accountability Office estimated in a report last summer that about 30 million workers had too little withheld from their paychecks, which made their take home pay bigger but increased their tax liability. That’s about 3 million more workers than normal.

    Few taxpayers appear to have heeded the IRS’ advice to do a “paycheck checkup” to make sure they had the proper amount withheld. Payroll processor ADP, which is responsible for paying one out of every six Americans, said the vast majority of people in its system didn’t update their withholdings last year.

    Some taxpayers who did make adjustments found they couldn’t get it quite right.

    Kevin McCreanor of Milton, Georgia and his wife normally get a sizeable refund each year — it was more than $12,000 last year. While they know waiting for a large refund isn’t the best strategy financially, they like a refund and they put anything they get back toward their daughters’ education. Their income, earned primarily from his wife’s job in telecom, can vary greatly, so there was comfort in never facing a big bill.

    The couple increased her paycheck withholdings to ensure the same but found they are only getting back $519 this year. Their income and tax rate did increase, and McCreanor acknowledges there is probably more he could have done to prepare but he is very disappointed all the same.

    Some surprises were welcome, however. Brian Goodell and his wife typically face a tax bill of anywhere from $10,000 to $15,000 each year. But this year the Tigard, Oregon, couple is getting a $15,000 refund. They believe they got some benefit from the increased child tax credit. They also made more charitable donations and increased their withholdings. While Goodell isn’t entirely sure why it worked out so well, he’ll gladly take the refund.

    Taxpayers can get a better sense of how they fared by looking at their tax liability or effective tax rate. This information is often available on the summary received from an accountant or tax preparation software. They can also look at the “total tax” on those summaries or form 1040. These are not perfect measures either, but provide some perspective.

    And remember that getting a refund is not necessarily a good thing. Breaking even is really the best outcome from an economic point of view. If you get a refund, that means the government has been holding onto your money when you could have been using it.

    Additionally, consider that taxes are rarely an equal comparison from year-to-year, said Eric Bronnenkant, the head of tax at Betterment and a CPA and certified financial planner. People’s lives change in ways that can dramatically influence their taxes, such as marriages, divorces, kids, moving or job changes. The average taxpayer may not realize the full impact some of these changes might have.

    “I am not surprised by the reaction people are having,” Bronnekant said. “I think for some people the reaction is more justified than others.”
    Another mark of a tyrant is that he likes foreigners better than citizens, and lives with them and invites them to his table; for the one are enemies, but the Others enter into no rivalry with him. - Aristotle's Politics Book 5 Part 11



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  3. #2
    “We were very comfortable with our tax law, it had basically been there since 1986, suddenly all these things that were very important to people changed ... it’s all different,” said Howard Gleckman, a senior fellow at the Tax Policy Center.
    Speak for yourself $#@!.

    Some people already saw the benefit in the form of bigger paychecks. That’s because the law forced employers to change what they withheld. But the system is far from perfect, and many workers didn’t have enough in taxes set aside. Now, the IRS wants that money.
    Good. Taxes should be collected in one lump sum, maybe then the slaves would revolt.
    "The Patriarch"

  4. #3
    Quote Originally Posted by Origanalist View Post
    Good. Taxes should be collected in one lump sum, maybe then the slaves would revolt.
    Yup, this.

    Make AmeriKunts cut check once a year, hell, I'd be happy with once a month, with what they owe the Ruling Complex.

  5. #4
    Quote Originally Posted by Anti Federalist View Post
    Yup, this.
    Make AmeriKunts cut check once a year, hell, I'd be happy with once a month, with what they owe the Ruling Complex.
    Quarterly is bad enough.

  6. #5
    Isn't there a bonus penalty if you don't let the federal government withhold enough?

    Quote Originally Posted by Origanalist View Post
    Good. Taxes should be collected in one lump sum, maybe then the slaves would revolt.
    Same thing with property taxes. Because of 30-year mortgage escrows, people think voting for tax hikes is no big deal.

  7. #6
    Quote Originally Posted by EBounding View Post
    Isn't there a bonus penalty if you don't let the federal government withhold enough?
    Only if you commit fraud on your w-4 to alter your withholding on purpose to under hold. There is however a bonus penalty calculated on a per quarter basis for people that pay estimated taxes instead of withholding.

  8. #7
    More sensationalized BS from AP. "Most Americans will benefit from the changes, but these 5 or 6 people aren't getting their interest free loan back, so it sucks for EVERYBODY!!!!"
    Quote Originally Posted by Andrew Ryan
    In Washington you can see them everywhere: the Parasites and baby Stalins sucking the life out of a once-great nation.

  9. #8
    Avg refund is 2K , before it was 2800 . Good Lord . In my entire working career I never got a refund over 1K more than a couple times . If I was getting a 3K refund that means I am having too much with held and need to make an adjustment . When I was young it was not unusual to have four teenagers or more at the dinner table on a Saturday . I would rather have had the cash all year to put towards 401K ,groceries or paying extra on a mortgage etc .
    Do something Danke



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  11. #9
    Universal Basic Income - it solves all problems

    Gulag Chief:
    "Article 58-1a, twenty five years... What did you get it for?"
    Gulag Prisoner: "For nothing at all."
    Gulag Chief: "You're lying... The sentence for nothing at all is 10 years"



  12. #10
    Quote Originally Posted by oyarde View Post
    Avg refund is 2K , before it was 2800 . Good Lord . In my entire working career I never got a refund over 1K more than a couple times . If I was getting a 3K refund that means I am having too much with held and need to make an adjustment . When I was young it was not unusual to have four teenagers or more at the dinner table on a Saturday . I would rather have had the cash all year to put towards 401K ,groceries or paying extra on a mortgage etc .
    But you see, if people have more daily take home pay rather than a big refund at the end of the year, they might not put as much on their credit cards over the year and pay that interest the banks love. This cannot stand!

  13. #11
    Shame on them, for not having their income withheld properly.

    I hope the $10,160 includes the appropriate fees & penalties for their errors.
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  14. #12
    We make $360k yr, got a $6k refund. Not complaining.

    NYS had a new tax deduction limit enforced due to Trump's tax bill, which hurts us though I guess we aren't yet feeling it. Think my wife and I both claim 0 from our biweekly paychecks and have huge mortgage and student loan obligations so that is why we got a decent (ie: interest free loan to the federal government) refund.
    Last edited by Murray N Rothbard; 02-19-2019 at 12:39 PM.

  15. #13
    I hate these stories that try to paint people as victims of a tax increase when a lot of them are paying less in taxes but just getting smaller refunds because of how their tax withholding is set up.

    I know some people really are paying more, and those who really are I do sympathize with. But not these people who are just getting smaller refunds.

  16. #14
    For the first time in forever I don't owe, and I had more take home pay.
    "I shall bring justice to Westeros. Every man shall reap what he has sown, from the highest lord to the lowest gutter rat. They have made my kingdom bleed, and I do not forget that."
    -Stannis Baratheon

  17. #15
    Quote Originally Posted by specsaregood View Post
    But you see, if people have more daily take home pay rather than a big refund at the end of the year, they might not put as much on their credit cards over the year and pay that interest the banks love. This cannot stand!
    Yeah , no crap . If people had access to most of what they earned they would not be using a credit card .
    Do something Danke

  18. #16
    Quote Originally Posted by oyarde View Post
    Yeah , no crap . If people had access to most of what they earned they would not be using a credit card .
    They still would. People who think that all they need is a certain amount more will always feel that way no matter how much more they have. If they live above their means at a lower income, they still will live above their means at a higher one.

    This rule works with politicians too.



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  20. #17
    Quote Originally Posted by Murray N Rothbard View Post
    We make $360k yr, got a $6k refund. Not complaining.

    NYS had a new tax deduction limit enforced due to Trump's tax bill, which hurts us though I guess we aren't yet feeling it. Think my wife and I both claim 0 from our biweekly paychecks and have huge mortgage and student loan obligations so that is why we got a decent (ie: interest free loan to the federal government) refund.
    Had I known , last time I was there I would have tried to get you an opportunity to buy me a beer .
    Do something Danke

  21. #18
    Quote Originally Posted by Superfluous Man View Post
    They still would. People who think that all they need is a certain amount more will always feel that way no matter how much more they have. If they live above their means at a lower income, they still will live above their means at a higher one.

    This rule works with politicians too.
    Most certainly with politicians .
    Do something Danke

  22. #19
    Quote Originally Posted by Origanalist View Post
    Speak for yourself $#@!.



    Good. Taxes should be collected in one lump sum, maybe then the slaves would revolt.
    Some people suggest tariffs as a better form of taxation but that tax is hidden in the price of goods so consumers would have no idea what they are actually paying in taxes.

    Refunds are down (and some actually having to pay when they used to get a refund) because withholding tables were updated and less money taken out during the year. You got more money then and less money now.

  23. #20
    Quote Originally Posted by Zippyjuan View Post
    hidden in the price of goods so consumers would have no idea what they are actually paying in taxes.
    We certainly wouldn't want that to happen!
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  24. #21
    Quote Originally Posted by Zippyjuan View Post
    Some people suggest tariffs as a better form of taxation but that tax is hidden in the price of goods so consumers would have no idea what they are actually paying in taxes.
    Tariffs are better, the fact that they are part of the cost of goods is a much smaller problem than the things that are better about them.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



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