2018 Taxes

Not trying to be a political thread, but some folks may take it there. I just wanted to give a heads up - went to H & R block to get our taxes done. Wife doesn't trust me to keep us from getting audited and jailed. Smart woman.

Without getting into income numbers, which I know doesn't help, we're getting about 1,900 back from our 2017 return. H & R Block has the 2018 stuff programmed in and shows you what to expect next year. I will be paying about 2,000 next year. My bracket went up from 25% to 28%. And this is with the addition of a child tax credit. That's what, a swing of 4,000?? Good golly Miss Molly.

Not sure if the TaxCut software does the same thing, but you may want to look into where you are to see if you need to increase withholdings.

I have an accountant do my taxes every year. Got too hard to sort through all the K-1s, 1099s, W-2s, etc. Charges me something like $120.00 to cipher thorough all the paperwork, figure my taxes, set up direct deposit for my refund (when/if I get one), and present use with a nice binder with all outran information of the year. Worth every dime. Got back $1100.00 this year ($300.00 federal, $800.00 Ark state). He also included an estimate of what my taxes will be next year if my income remains unchanged. $3111.00 refund.
No children at home, and we don't itemize. My income from pension, FERS supplement, and dividends paid on investments was north of six figures, and my taxes as a percentage of income averaged under 20%.
Since your federal taxes are figured across all tax brackets (from the lowest to the highest that fits your income bracket) maybe H&R is stating that a portion of your income will be taxed at a higher level. But, not all. And there is no 28% bracket under the new tax law, so you might want to double check their figures.
New tax brackets and rates for 2018 - CNNMoney

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Originally Posted by RazorCat

I have an accountant do my taxes every year. Got too hard to sort through all the K-1s, 1099s, W-2s, etc. Charges me something like $120.00 to cipher thorough all the paperwork, figure my taxes, set up direct deposit for my refund (when/if I get one), and present use with a nice binder with all outran information of the year. Worth every dime. Got back $1100.00 this year ($300.00 federal, $800.00 Ark state). He also included an estimate of what my taxes will be next year if my income remains unchanged. $3111.00 refund.
No children at home, and we don't itemize. My income from pension, FERS supplement, and dividends paid on investments was north of six figures, and my taxes as a percentage of income averaged under 20%.
Since your federal taxes are figured across all tax brackets (from the lowest to the highest that fits your income bracket) maybe H&R is stating that a portion of your income will be taxed at a higher level. But, not all. And there is no 28% bracket under the new tax law, so you might want to double check their figures.
New tax brackets and rates for 2018 - CNNMoney

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Gosh I hope you're right and he's waaayy wrong..... Thanks so much for that info, I appreciate it!

What state do you live in JF? That seems to be a major factor because of the elimination of the state tax deduction.

Thanks

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Originally Posted by jonfresno

Not trying to be a political thread, but some folks may take it there. I just wanted to give a heads up - went to H & R block to get our taxes done. Wife doesn't trust me to keep us from getting audited and jailed. Smart woman.

Without getting into income numbers, which I know doesn't help, we're getting about 1,900 back from our 2017 return. H & R Block has the 2018 stuff programmed in and shows you what to expect next year. I will be paying about 2,000 next year. My bracket went up from 25% to 28%. And this is with the addition of a child tax credit. That's what, a swing of 4,000?? Good golly Miss Molly.

Not sure if the TaxCut software does the same thing, but you may want to look into where you are to see if you need to increase withholdings.

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MAGA!

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Originally Posted by tsptalk

What state do you live in JF? That seems to be a major factor because of the elimination of the state tax deduction.

Thanks

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Maryland. Yeah, I'll get hit on the state and property tax deduction for sure. I'll lose around 3 thousand off the gross, but still, whatever H&R came up with seems like that would still be excessive. 3,000 off the gross would raise it, what about $750 or so?

Now I do need to look more closely at what RazorCat posted. It sure doesn't make sense to see a 28% bracket on their comparison screen when there isn't one.

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Originally Posted by jonfresno

Not trying to be a political thread, but some folks may take it there. I just wanted to give a heads up - went to H & R block to get our taxes done. Wife doesn't trust me to keep us from getting audited and jailed. Smart woman.

Without getting into income numbers, which I know doesn't help, we're getting about 1,900 back from our 2017 return. H & R Block has the 2018 stuff programmed in and shows you what to expect next year. I will be paying about 2,000 next year. My bracket went up from 25% to 28%. And this is with the addition of a child tax credit. That's what, a swing of 4,000?? Good golly Miss Molly.

Not sure if the TaxCut software does the same thing, but you may want to look into where you are to see if you need to increase withholdings.

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Do you itemize? If you are due to pay more next year, it is likely due to the increase in the standard deduction and the elimination of on the current personal exemptions. You probably should increase your withholdings since new tax tables that went into effect earlier this year will result in you paying less throughout the year.

I figure I will breakeven with the new tax laws. 2017 is first year ever that I didn't get a refund or have to pay - paid exactly what was due. I will probably have to take standard deduction next year. Even if I can itemize, it won't be much more than the increased standard deduction. The 10K limit on state/local taxes is going to make it hard to itemize (even option of doubling up on property taxes every other year is limited due to 10K limit and higher standard deductions).