Calculating 2018 Tax Liability

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
remomnyc
Posts: 591
Joined: Mon Jan 04, 2016 4:27 pm

Calculating 2018 Tax Liability

Post by remomnyc » Wed Oct 03, 2018 7:02 pm

Typically, I have extra $ withheld for taxes throughout the year, so I don't owe too much. This year, I retired in May, so I had less withheld than usual, but I will earn less $ than usual. I wanted to figure out if I would owe taxes, so I could make estimated payments if necessary. I used the IRS tax calculator, which told me I would get a $5k refund. I then checked it against taxcaster, which told me I would owe $15k. What should I do next?

delamer
Posts: 6283
Joined: Tue Feb 08, 2011 6:13 pm

Re: Calculating 2018 Tax Liability

Post by delamer » Wed Oct 03, 2018 7:05 pm

Are you sure you were using the 2018 estimate from TaxCaster?

remomnyc
Posts: 591
Joined: Mon Jan 04, 2016 4:27 pm

Re: Calculating 2018 Tax Liability

Post by remomnyc » Wed Oct 03, 2018 7:18 pm

I'll check again to make sure I was using the 2018 taxcaster.

edit: The version I used says it was updated 3/22/18. Is there a more recent version?

J295
Posts: 1684
Joined: Sun Jan 01, 2012 11:40 pm

Re: Calculating 2018 Tax Liability

Post by J295 » Wed Oct 03, 2018 7:23 pm

How about a back of the envelope calculation, using your last year 1040 as a form.

delamer
Posts: 6283
Joined: Tue Feb 08, 2011 6:13 pm

Re: Calculating 2018 Tax Liability

Post by delamer » Wed Oct 03, 2018 7:39 pm

remomnyc wrote:
Wed Oct 03, 2018 7:18 pm
I'll check again to make sure I was using the 2018 taxcaster.

edit: The version I used says it was updated 3/22/18. Is there a more recent version?
The version I have does an estimate for 2017.

There is a tab that says “Looking at 2018” that gives you a 2018 estimate using the same info entered for 2017.

remomnyc
Posts: 591
Joined: Mon Jan 04, 2016 4:27 pm

Re: Calculating 2018 Tax Liability

Post by remomnyc » Wed Oct 03, 2018 8:16 pm

delamer wrote:
Wed Oct 03, 2018 7:39 pm
The version I have does an estimate for 2017.

There is a tab that says “Looking at 2018” that gives you a 2018 estimate using the same info entered for 2017.
You're right. Even though it says it will calculate 2018 taxes on the first page, it says " 2017 estimated federal tax owed" when the calculation is completed. The version I have does not have a tab that says "Looking at 2018".

delamer
Posts: 6283
Joined: Tue Feb 08, 2011 6:13 pm

Re: Calculating 2018 Tax Liability

Post by delamer » Wed Oct 03, 2018 8:20 pm

remomnyc wrote:
Wed Oct 03, 2018 8:16 pm
delamer wrote:
Wed Oct 03, 2018 7:39 pm
The version I have does an estimate for 2017.

There is a tab that says “Looking at 2018” that gives you a 2018 estimate using the same info entered for 2017.
You're right. Even though it says it will calculate 2018 taxes on the first page, it says " 2017 estimated federal tax owed" when the calculation is completed. The version I have does not have a tab that says "Looking at 2018".
Are you using the free app?

remomnyc
Posts: 591
Joined: Mon Jan 04, 2016 4:27 pm

Re: Calculating 2018 Tax Liability

Post by remomnyc » Wed Oct 03, 2018 8:21 pm

delamer wrote:
Wed Oct 03, 2018 8:20 pm
remomnyc wrote:
Wed Oct 03, 2018 8:16 pm
delamer wrote:
Wed Oct 03, 2018 7:39 pm
The version I have does an estimate for 2017.

There is a tab that says “Looking at 2018” that gives you a 2018 estimate using the same info entered for 2017.
You're right. Even though it says it will calculate 2018 taxes on the first page, it says " 2017 estimated federal tax owed" when the calculation is completed. The version I have does not have a tab that says "Looking at 2018".
Are you using the free app?
Yup. Does this mean that I can rely on the IRS calculation which estimates a $5k refund?

delamer
Posts: 6283
Joined: Tue Feb 08, 2011 6:13 pm

Re: Calculating 2018 Tax Liability

Post by delamer » Wed Oct 03, 2018 8:25 pm

remomnyc wrote:
Wed Oct 03, 2018 8:21 pm
delamer wrote:
Wed Oct 03, 2018 8:20 pm
remomnyc wrote:
Wed Oct 03, 2018 8:16 pm
delamer wrote:
Wed Oct 03, 2018 7:39 pm
The version I have does an estimate for 2017.

There is a tab that says “Looking at 2018” that gives you a 2018 estimate using the same info entered for 2017.
You're right. Even though it says it will calculate 2018 taxes on the first page, it says " 2017 estimated federal tax owed" when the calculation is completed. The version I have does not have a tab that says "Looking at 2018".
Are you using the free app?
Yup. Does this mean that I can rely on the IRS calculation which estimates a $5k refund?
I would.

Do you have the several outline lines in the upper left of the app screen?

If you click on those, you should see the looking at 2018 option in the drop down.

Or you could try doing an update for the app.

remomnyc
Posts: 591
Joined: Mon Jan 04, 2016 4:27 pm

Re: Calculating 2018 Tax Liability

Post by remomnyc » Wed Oct 03, 2018 8:42 pm

delamer wrote:
Wed Oct 03, 2018 8:25 pm
Or you could try doing an update for the app.
Thanks, Delamar.

kaneohe
Posts: 5097
Joined: Mon Sep 22, 2008 12:38 pm

Re: Calculating 2018 Tax Liability

Post by kaneohe » Wed Oct 03, 2018 10:26 pm

I like this one:
https://www.mortgagecalculator.org/calc ... ulator.php

It gave the same results as this one (using 2018 results)
https://www.hrblock.com/tax-calculator/#/en/te/aboutYou

These two usually agree with Taxcaster. Taxcaster calculates both 2017 and 2018 results at the end.

The irs calculator (which I had never heard before) gave a slightly different answer (lower).
It doesn't look like it's from the IRS...just has that name......but it is interesting since it seems to calculate
state tax (at least for CA).

OP.....sounds like you like the irs calculator results because it gives you the result you want :happy
If would try the other 3 calculators....if they agree among themselves, I would be more inclined to trust them
over the irs calculator.

jacoavlu
Posts: 576
Joined: Sun Jan 06, 2013 12:06 pm

Re: Calculating 2018 Tax Liability

Post by jacoavlu » Wed Oct 03, 2018 10:35 pm

If you like spreadsheets you can also use excel1040.com

Probably more complex than what you need though. But could give you another data point

Sportswhiz00
Posts: 158
Joined: Mon Aug 18, 2014 8:04 pm

Re: Calculating 2018 Tax Liability

Post by Sportswhiz00 » Thu Oct 04, 2018 7:32 am

i have found taxcaster estimator to have flaws sometimes. I use it to ballpark my taxes but I wouldn’t use it if I was actually relying on it for budget purposes. For that I would (and do) once a year, in middle of year, run the numbers myself either by running a whole tax return or just looking back to last year, and plugging in changes in my amounts and tax rates (and new tax law changes). I find the latter approach to only take 30 minutes.

Nowizard
Posts: 1596
Joined: Tue Oct 23, 2007 5:33 pm

Re: Calculating 2018 Tax Liability

Post by Nowizard » Thu Oct 04, 2018 7:39 am

If you itemized last year and will not this year, it can make a significant difference. Running figures comparing last year's itemization with this year's standard deduction results in a significant tax increase for us in 2018 that exceeds a slight increase in taxable income.

Tim

jebmke
Posts: 8427
Joined: Thu Apr 05, 2007 2:44 pm

Re: Calculating 2018 Tax Liability

Post by jebmke » Thu Oct 04, 2018 7:42 am

Nowizard wrote:
Thu Oct 04, 2018 7:39 am
If you itemized last year and will not this year, it can make a significant difference. Running figures comparing last year's itemization with this year's standard deduction results in a significant tax increase for us in 2018 that exceeds a slight increase in taxable income.

Tim
And the difference can be quite substantial at the state level depending on how state income taxes are structured. In Maryland, the standard deduction is very low so a shift to standard deduction for some people is going to be very expensive at the state level.

I do volunteer tax preparation for TaxAide. I am expecting to have a lot of very tough conversations with taxpayers who end up with a February/March surprise on their state income tax return.
When you discover that you are riding a dead horse, the best strategy is to dismount.

User avatar
Yuba
Posts: 286
Joined: Tue Feb 20, 2007 11:52 pm
Location: Orange County, CA

Re: Calculating 2018 Tax Liability

Post by Yuba » Thu Oct 04, 2018 3:43 pm

I recently have been using this one:

https://www.olt.com/main/home/taxestimator.asp

that I found to be very useful.

Rick dba Yuba

User avatar
FiveK
Posts: 5738
Joined: Sun Mar 16, 2014 2:43 pm

Re: Calculating 2018 Tax Liability

Post by FiveK » Thu Oct 04, 2018 10:25 pm

For estimating 2018 taxes, the "what if?" worksheets of TurboTax, TaxAct, etc. may be the most accurate if one has an extremely complex situation.

If one has merely a "somewhat complex" situation, various web-based and spreadsheet programs are available. To date, the personal finance toolbox spreadsheet has been the most accurate (i.e., using 2018 instead of 2017 tables, including more credits, phaseouts, etc.). This includes all the options already mentioned in this thread.

J295
Posts: 1684
Joined: Sun Jan 01, 2012 11:40 pm

Re: Calculating 2018 Tax Liability

Post by J295 » Fri Oct 05, 2018 7:08 am

OP

Sketch out your 2018 financial situation rounding to the nearest thousand dollars and post it and we will give you an estimate. Be sure to let us know your filing status

Also, probably a little late in the game to be very concerned about estimates. Moreover, missing an estimate results in interest at a modest rate and no penalties for year in which you retire if you are 62 or over, which may well be your case.

kaneohe
Posts: 5097
Joined: Mon Sep 22, 2008 12:38 pm

Re: Calculating 2018 Tax Liability

Post by kaneohe » Fri Oct 05, 2018 8:40 am

J295 wrote:
Fri Oct 05, 2018 7:08 am
..................................................

Also, probably a little late in the game to be very concerned about estimates. Moreover, missing an estimate results in interest at a modest rate and no penalties for year in which you retire if you are 62 or over, which may well be your case.
Isn't the bolded part always true so retiring/age/etc. don't change the "penalty" which is just the interest?

remomnyc
Posts: 591
Joined: Mon Jan 04, 2016 4:27 pm

Re: Calculating 2018 Tax Liability

Post by remomnyc » Wed Oct 17, 2018 10:45 am

I tried the mortgage calculator and the HR Block calculator. The mortgage calculator says I will owe $2k. HR Block says I will get $7k back, but asked me for dividends and interest but did not let me enter the amounts nor my tax loss carry forward. Given how significant dividends and interest are, I know the $7k is wrong. After having tried a number of calculators, I am comfortable that whatever I owe will not trigger a penalty or significant interest. Thanks everyone.

kaneohe
Posts: 5097
Joined: Mon Sep 22, 2008 12:38 pm

Re: Calculating 2018 Tax Liability

Post by kaneohe » Wed Oct 17, 2018 2:09 pm

remomnyc wrote:
Wed Oct 17, 2018 10:45 am
I tried the mortgage calculator and the HR Block calculator. The mortgage calculator says I will owe $2k. HR Block says I will get $7k back, but asked me for dividends and interest but did not let me enter the amounts nor my tax loss carry forward. Given how significant dividends and interest are, I know the $7k is wrong. After having tried a number of calculators, I am comfortable that whatever I owe will not trigger a penalty or significant interest. Thanks everyone.
I have never had that problem w/ the HRB calculator: are we using the same one? https://www.hrblock.com/tax-calculator/#/en/te/aboutYou

Almost there
Posts: 829
Joined: Thu Jan 03, 2008 7:06 pm
Location: Arizona USA

Re: Calculating 2018 Tax Liability

Post by Almost there » Thu Oct 25, 2018 8:37 pm

Kaneohe wrote:
I have never had that problem w/ the HRB calculator: are we using the same one? https://www.hrblock.com/tax-calculator/#/en/te/aboutYou
The Mortgage Calculator worked better for me than HRB. With both I couldn't find where I would post the taxes I had deducted from my Social Security payments.

Almost there


Edit: found it in the Mortgage Calculator
Last edited by Almost there on Thu Oct 25, 2018 8:46 pm, edited 1 time in total.

Danielle896
Posts: 26
Joined: Sat Jan 27, 2018 1:46 pm

Re: Calculating 2018 Tax Liability

Post by Danielle896 » Thu Oct 25, 2018 8:44 pm

Here's the spreadsheet that I like.

https://sites.google.com/site/excel1040 ... ew-tax-law

kaneohe
Posts: 5097
Joined: Mon Sep 22, 2008 12:38 pm

Re: Calculating 2018 Tax Liability

Post by kaneohe » Thu Oct 25, 2018 9:34 pm

Almost there wrote:
Thu Oct 25, 2018 8:37 pm
]

The Mortgage Calculator worked better for me than HRB. With both I couldn't find where I would post the taxes I had deducted from my Social Security payments.

Almost there


Edit: found it in the Mortgage Calculator
Both of those calculators are designed to calculate the tax on your income.......not to calculate the tax owed in April after your subtract your payments/withholding,etc. Just manually subtract your payments.

I'm not sure what you found in the mortgage calculator but I bet it increases your taxes , not decreases them as you expect.

Almost there
Posts: 829
Joined: Thu Jan 03, 2008 7:06 pm
Location: Arizona USA

Re: Calculating 2018 Tax Liability

Post by Almost there » Wed Oct 31, 2018 5:51 pm

Oh I know that my tax liability will increase since my Social Security increased and I will have my first RMD this year.

Danielle896
Posts: 26
Joined: Sat Jan 27, 2018 1:46 pm

Re: Calculating 2018 Tax Liability

Post by Danielle896 » Wed Oct 31, 2018 6:18 pm

Danielle896 wrote:
Thu Oct 25, 2018 8:44 pm
Here's the spreadsheet that I like.

https://sites.google.com/site/excel1040 ... ew-tax-law
Just thought I would point out that this applies to the 2018 tax year.

Post Reply