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Old 03-04-2019, 11:26 AM
 
659 posts, read 351,538 times
Reputation: 2429

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Quote:
Originally Posted by Grlzrl View Post
There is only ONE number you should be looking at to see if you are better off in 2018 under the new tax plan. Effective rate. Look at your effective rate compared to the prior year. Not marginal rate, not total taxes, not refund amount, not amount owed. EFFECTIVE rate. How to calculate it: Total taxes paid/Gross income. If you haven't done that, don't come back here griping about 'my taxes went up'. Because if you haven't done that, you don't know.
Well, I HAVE done that and I AM gonna gripe because my ETR went UP ~1%. Tubotax confirms that in 2017-2018 summaries.


Make no mistake. Taxes DID GO UP for a sizeable amount of people in this country.
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Old 03-04-2019, 01:58 PM
 
4,800 posts, read 1,207,587 times
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Quote:
Originally Posted by BijouBaby View Post
Well, I HAVE done that and I AM gonna gripe because my ETR went UP ~1%. Tubotax confirms that in 2017-2018 summaries.


Make no mistake. Taxes DID GO UP for a sizeable amount of people in this country.
What state are you in?
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Old 03-04-2019, 02:02 PM
 
4,800 posts, read 1,207,587 times
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Quote:
Originally Posted by SuiteLiving View Post
Calculating as a % of AGI for both 2017 and 2018 is apples to apples.
Ok, hang tight. Apparently, AGI and gross are the same thing. But there is a line for adjustments to income of which I have none. I have to figure it out.
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Old 03-04-2019, 02:15 PM
 
Location: Living rent free in your head
30,989 posts, read 13,564,601 times
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Quote:
Originally Posted by kevinm View Post
If what you owe is over a certain percentage of what was actually withheld, you have to pay a penalty for "under withholding". If you actually owe $25K in taxes based on AGI and your employer only withheld $10K, you owe $15K. The IRS will penalize a percentage of the $15K. I disagree with this. As long as all taxes are paid by April 15, there should be no penalty.
I have never heard of the under withholding penalty going away as long as you file by April 15th. IRS knows that there was a problem with the withholding tables, otherwise they wouldn't have waived penalties for people who paid at least 85% of their tax obligation for 2018. (it is normally 90%) https://www.forbes.com/sites/kellyph.../#356e7c47c8ee
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Old 03-04-2019, 02:25 PM
 
Location: Living rent free in your head
30,989 posts, read 13,564,601 times
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Quote:
Originally Posted by Grlzrl View Post
Ok, hang tight. Apparently, AGI and gross are the same thing. But there is a line for adjustments to income of which I have none. I have to figure it out.
It could be that you don't have any adjustments to gross, but many other people do hence, you use AGI to calculate effective tax rate.

Adjusted gross income (AGI) is your gross income — which includes wages, dividends, alimony, capital gains, business income, retirement distributions and other income — minus certain payments you’ve made during the year, such as student loan interest or contributions to a traditional individual retirement account or a health savings account.
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Old 03-04-2019, 02:36 PM
 
Location: Living rent free in your head
30,989 posts, read 13,564,601 times
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Quote:
Originally Posted by Grlzrl View Post
Possibly. But the problem is when most people would rather get $2k back than $100 per paycheck. In other words, they are worse off in the net. Dumb, dumb, dumb.
$2,000 does not turn out to be $200 a paycheck unless they only work 10 months a year But let's just stick with the $200 a month that they allow IRS to keep for them until they file their tax return. If they were to put that in a bank @ 2.3% interest they would have earned $30.11 in interest - BFD.

What you may not understand is that people who are on a really tight budget find plenty of legitimate reasons to use that $200 for things that they really need, and I'm not talking just trivial junk. I was in that situation for a few years when I was young and was raising two kids and if I had $50 left after paying my bills and mortgage there were at least 4 or 5 things that I could have justified spending that on, you know things like new shoes for the kids, a replacement faucet for the one that leaks, a tune-up for the car. Instead I allowed IRS to save that money for me and as result I was able to pack the kids in the car once a year and take them camping.
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Old 03-04-2019, 02:42 PM
 
71,463 posts, read 71,652,652 times
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most use that refund as a forced savings ...overpaying is the best thing they can do and the only way they can see a meaningful lump sum that can go for something a bit more meaningful ...

i hate the years we have to pay...i look at that nice balance on 12/31 each year from our investments and end up shelling out thousands in taxes later ..

we do estimated most years and tend to get back now that we are retired .
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Old 03-04-2019, 07:01 PM
 
2,139 posts, read 524,377 times
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Quote:
Originally Posted by BijouBaby View Post
Make no mistake. Taxes DID GO UP for a sizeable amount of people in this country.
It's the price we pay for living in a civilized society.
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Old 03-04-2019, 07:04 PM
 
2,139 posts, read 524,377 times
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Quote:
Originally Posted by 2sleepy View Post
If they were to put that in a bank @ 2.3% interest they would have earned $30.11 in interest - BFD.
That's about the price of lunch on the ski slopes. Who says there's no such thing as a free lunch?
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Old 03-04-2019, 07:07 PM
 
Location: Living rent free in your head
30,989 posts, read 13,564,601 times
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Quote:
Originally Posted by RationalExpectations View Post
It's the price we pay for living in a civilized society.
No, it's the price we pay when the Koch's bought Paul Ryan for half a million dollars
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