Did my taxes yesterday. I work in tech, and claim zero for federal and state. No change to base salary Federal Last year: $3,800 refund (yes, I know it's my own money) This year: I need to pay $400. Net swing, not in my favor: $4,200. State: Last year: ~$300 refund This year: I need to pay $400 Net swing, not in my favor: $700 Net tax swing for FY2018: $4,900 not in my favor. Thanks, Trump..
You also said base pay. Did you have any bonuses or commissions that may have been taxed differently?
I'm salaried, no commissions, nor bonuses Federal: tax tables narrowed, change in the standard deduction vs. itemization. State: No significant changes that I was able to see in the tables, nor enacted laws. Based on discussions with my accountant, the capital gains distributions which happened in November (near market peak) were ~2x last years, and that was the difference in the swing, when coupled with the tax table narrowing. That seems to be the difference. Although he said my 2018 number, under the 2017 rules would have resulted in an @ $1800 refund. Which makes sense based on the capital gains part.
Tax lady I use said the payroll deduction decreased with the Trump tax cut so it caught several people off guard. She said if she knew they were going to do that she would have warned her clients to increase their payroll deductions to compensate. Her comment was that it was to try to get people to spend more and juice the economy.
Yeah, I've never understood why I have to claim zero + extra $ with a family. The charts don't jive to me.
Sorry Sean, but I disagree with you. Salary was static, no changes to take home pay (net). Capital Gains went up. I claimed zero exemptions in both years (state and federal) The changing of the deduction and the changes to the rate tables are the only differences (from a tax law standpoint) from 2017. This year: I owe $400 This year, with 2017 rules instead: Refund* of ~$1,800 Using the same rules (2017) my refund* would have gone from $3,800 to $1,800, which would be consistent with the Capital Gains increases I had. Using the 2018 rules, my refund* went from $3,800 to owing $400. Even allowing for the $2000 swing associated with my capital gains, to go from an $1,800 refund* to owing $400 is a delta of $2,200, which goes directly to the changes made in 2018. For 2019, I'm just going to make a couple of pre-payments to the tax man so I net out at a refund* of $200ish. *Yes I know it's my own money that's getting refunded to me.
I'm thinking it has to have something to do with the state and local tax deduction cap: https://taxfoundation.org/state-and-local-tax-deduction-by-county-2016/ (scroll for map).
You're comparing all kinds of weird shit - how about this.... Find out what percentage of your actual job income you paid in federal tax. Compare the two years. If you had capital gains last year that put you in a different bracket than this year they aren't comparable so all the numbers you're talking don't make sense to me sorry. Probably just me tho
Fully agree. Probably just you. The capital gains amount would not send me to a new bracket. Payment into the federal taxes was ~ $300 more than last year.
Sounds like that tax lady is an idiot because everyone knew the payroll deduction decreased. Thats why you got more money in your paycheck! I'd find a new tax lady if I were you.