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Old 01-30-2019, 03:37 PM
 
1,433 posts, read 720,135 times
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Quote:
Originally Posted by tgbwc View Post
My wife is working on them now. Last year we owed ~900 in federal tax and got a state refund. It looks like we will owe just under $5k this year!? Ouch. I hope thatís not right.
Yep...it's what I'm experiencing too (even more)....I was hoping I was wrong but the math keeps on checking out. I need to use Abbott & Costello math.
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Old 01-30-2019, 03:51 PM
 
Location: Virginia
8,113 posts, read 12,679,374 times
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Quote:
Originally Posted by luckyram View Post
Yep...it's what I'm experiencing too (even more)....I was hoping I was wrong but the math keeps on checking out. I need to use Abbott & Costello math.
Claiming zero deductions always worked fine in the past. This year we don’t have enough to itemize so that hurts. That hurts us on the State then too since we can only take the standardized. Have an 18 yo child. Still looking at the numbers.
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Old 01-30-2019, 04:04 PM
 
1,433 posts, read 720,135 times
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Quote:
Originally Posted by tgbwc View Post
Claiming zero deductions always worked fine in the past. This year we don’t have enough to itemize so that hurts. That hurts us on the State then too since we can only take the standardized. Have an 18 yo child. Still looking at the numbers.
Don't know if you saw my earlier post but the 18 yr old would have gotten you a $4150 deduction under the "old" tax code and now you're only going to get $500. What's worse is you/spouse lose the exemption totally... what would have been $4150 each is now $0 !!

So, right there $12450 in exemptions that you would have had gone like the wind thanks to the new tax changes...well, really $11950 gone since you get the $500 for the one dependent...whoopee!
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Old 01-30-2019, 04:27 PM
 
Location: Virginia
8,113 posts, read 12,679,374 times
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Quote:
Originally Posted by luckyram View Post
Don't know if you saw my earlier post but the 18 yr old would have gotten you a $4150 deduction under the "old" tax code and now you're only going to get $500. What's worse is you/spouse lose the exemption totally... what would have been $4150 each is now $0 !!

So, right there $12450 in exemptions that you would have had gone like the wind thanks to the new tax changes...well, really $11950 gone since you get the $500 for the one dependent...whoopee!
Yes. Guess weíll have to have additional funds withheld this year.
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Old 01-30-2019, 04:38 PM
 
9,423 posts, read 7,071,740 times
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I've done the initial calculation to see what I owe vs what I get back.. It's basically the same as last year.. Owe about $350 to the feds, get about $375 from the state. A wash, basically.

But I haven't looked at what i've actually paid this year vs last.. Withholding per paycheck was less, so.. I have no question i've done better this year than last.

I probably have the simplest tax return there could be.. 0 dependents, single, one source of income.
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Old 01-30-2019, 05:18 PM
 
1,433 posts, read 720,135 times
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Quote:
Originally Posted by Tencent View Post
I am surprised a lot of you likely make more money than me and do not enlist the services of an accountant. It's sheer insanity to me that you'd venture out and try to DIY and figure out a complex system which employs hundreds of thousands of professionals annually.

I have no mortgage/property and no kids and I wouldn't go it alone. I think a lot of you are getting tripped up by the SALT change. I'm sure there are loopholes. But you actually need to stop trying to do your own taxes and pay a good CPA to find them. My taxes probably won't change much because I was likely paying more to begin with as I could never rely on the property or dependent deductions. However, I do have an S-Corp and likely there may be some added benefits for corporations seeing as Trump is Pro-Business. In general the government is Pro-Business and anti-individual.

If you don't have a corporation already you should be setting one up as well as a consultancy to take advantage of pass through losses. And that corporation should be used to manage some of your mutual funds, stocks etc to take advantage of the lower tax rate in investing that corps have over individuals. If you have a corporation you can deduct part of your housing expense, that includes primary residence whether it's mortgage or rent.

Turbo Tax isn't gonna cut it. My Wife used to use that and she could have been getting $1k more back per year (after the CPA fee) if she had been using my accountant (before we met)

Someone help me understand, why do people in this country think it's a good idea to try and play against the IRS on their own? I work with numbers every day and I can't back out how it works. There is no logic to it. Unless you're an Accounting major or Financial Analyst please don't try to play the game....You will lose every single time.
Quote:
Originally Posted by Tencent View Post

There are "secret" formulas because my CPA manages people with net worth 10x more than me. His strategy changes year to year based on what happens with his 100+ clients. They take big risks (by their own volition, not his) and when they get audited or inquiries those learnings get passed down so then he knows what will and will not work for the average Joe like me. That's what you fail to realize it's like any other trade. He knows what will fly under the radar he has been doing this for 30+ years. It's not about cheating the system it's about leveraging the IRS's own rules. Turbo Tax is giving you like 10 simplified versions when in reality there are over 10,000+ customizations available. It's the difference between a standard browser and developer mode....Don't open the box if you don't know what you're doing or you might break something.


If you are a recent grad unmarried no dependents a regular full time job with one W-2 then Credit Karma tax return can work for you. Add 4 conditions to that and they can't handle the complexity


There are 10,000 legal ways to minimize taxable income and the only difference between you and me is that I enlist the services of a professional who spends all day researching the tax code changes and strategizing on how to maximize his client's returns.

People need to respect specialization. Tax law is just like any other. It requires an expert. Not something Uncle Bobby should be handling.


No offense but it sounds like you guys have a dog in this fight....namely, preaching for CPAs or finance guys who are afraid of the business they may lose with less people itemizing or taking deductions. One estimate I saw said 94% of taxpayers this year may go with the standard deduction & the simplified process...that translates to less people paying for a CPA/help and that's got to hurt the bottom line of many pros.

I also don't get what you're saying about using a pro to "find stuff".....for you it may pay off with your corp/business angles but for regular Joe & Jane Citizen who just have regular jobs, one house , 2 kids, and IRA/401K, etc. the numbers are what they are and nothing is "hidden". Anything you have to "prove" your figures is going to be documented and unable to be tampered with (legally at least) on the W-2's, 1099's, 1098's, prop tax records, etc....You can't just make up the numbers or find math that will work differently unless you're going to go full blaze on the fraud. Those big money people give that CPA guy a lot more leeway to make or take tax advantaged gambles and more ways to play games I'm sure....not so the majority of regular people who work 2 jobs, are raising a family and trying to make ends meet.

Last edited by luckyram; 01-30-2019 at 06:31 PM..
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Old 01-30-2019, 05:36 PM
 
4,717 posts, read 10,309,443 times
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Iím hearing the same thing here in Ny. A lot of peeps usually just broke even or had to pay a small amount back every year are getting hammered this year!



Quote:
Originally Posted by redguard57 View Post
Everyone I know who lives in New Jersey or California is crying on their facebook about paying a significantly more than last year because of the changes to the property tax deduction.

The tax plan was horribly punitive to certain people.
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Old 01-30-2019, 07:38 PM
 
2,053 posts, read 595,092 times
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Quote:
Originally Posted by SuiteLiving View Post
Have you been audited since you started using this preparer?
No...

He has been doing my taxes for 10 years.

And for the record my S-Corp is REAL...I have side clients. Why do people automatically assume it's fraudulent?

Get it through your heads...There are perfectly LEGITIMATE ways to reduce your tax obligation. Turbo Tax won't enable you to find those ways.
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Old 01-30-2019, 07:44 PM
 
2,053 posts, read 595,092 times
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Quote:
Originally Posted by luckyram View Post
No offense but it sounds like you guys have a dog in this fight....namely, preaching for CPAs or finance guys who are afraid of the business they may lose with less people itemizing or taking deductions. One estimate I saw said 94% of taxpayers this year may go with the standard deduction & the simplified process...that translates to less people paying for a CPA/help and that's got to hurt the bottom line of many pros.

I also don't get what you're saying about using a pro to "find stuff".....for you it may pay off with your corp/business angles but for regular Joe & Jane Citizen who just have regular jobs, one house , 2 kids, and IRA/401K, etc. the numbers are what they are and nothing is "hidden". Anything you have to "prove" your figures is going to be documented and unable to be tampered with (legally at least) on the W-2's, 1099's, 1098's, prop tax records, etc....You can't just make up the numbers or find math that will work differently unless you're going to go full blaze on the fraud. Those big money people give that CPA guy a lot more leeway to make or take tax advantaged gambles and more ways to play games I'm sure....not so the majority of regular people who work 2 jobs, are raising a family and trying to make ends meet.
A 1099 is desirable but not essential. If my friend pays me to market his business I ask for a check and do Mobile deposit and report it on my K-1. Offset that income by buying a new computer reported as a business expense. Use that computer to do work. Increase the Investment in your business along with the income. There is no rule your business has to be cash flow positive when you have a W-2. Reporting 20k loss on a 200k gross will not raise red flags. This is all according to IRS guidelines.

People the strategic aspect of this is not rocket science. Anybody can do this. Get a good CPA and follow his instructions. I am not talking about Bob the accountant on Dunedin Drive whose office looks like it hasn't been updated since 1979. I mean Mike who graduated from Baruch in 00' and has almost 20 years experience and earned his stripes at Ernest and Young.
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Old 01-30-2019, 08:13 PM
 
1,433 posts, read 720,135 times
Reputation: 3702
Quote:
Originally Posted by Tencent View Post
A 1099 is desirable but not essential. If my friend pays me to market his business I ask for a check and do Mobile deposit and report it on my K-1. Offset that income by buying a new computer reported as a business expense. Use that computer to do work. Increase the Investment in your business along with the income. There is no rule your business has to be cash flow positive when you have a W-2. Reporting 20k loss on a 200k gross will not raise red flags. This is all according to IRS guidelines.

People the strategic aspect of this is not rocket science. Anybody can do this. Get a good CPA and follow his instructions. I am not talking about Bob the accountant on Dunedin Drive whose office looks like it hasn't been updated since 1979. I mean Mike who graduated from Baruch in 00' and has almost 20 years experience and earned his stripes at Ernest and Young.
Wait....I already agreed with you that your situation (as well as others with businesses/rental properties, etc.) opens up various potential avenues for tax advantages. But what I was saying was not everyone has the wherewithal to go that route - I was pointing out the majority of middle to upper middle class filers are dual working, single homeowners with a couple of kids and either don't have the option, time or finances to start a business or create one for tax mitigating purposes (or otherwise).

If it's working for you, fine....but we're talking apples and oranges here. Most here are looking for ways to lower their tax liability while being "regular" 9-5 people.
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