New tax law not so good for me?

[GordonG]

Quick question I was hoping someone could help with. I am working on my taxes now, and it looks like I'll owe $7 to the gov. I've never owed before, and typically get around $800 back for my federal refund. Other than getting roughly a 3% raise, not much has changed. What I do see is that the personal exemption of $4050 is now gone. Last year, I had about $10K worth of deductions, plus $4050 personal exemption.

This year, I am taking the standard $12K deduction (I'm single). So, 2017 was ~$14K of deductions vs $12K this year. Is that enough to wipe out my refund? Only other thing I can think of is number of exemptions I claim on my W4. It's been a while, but I think it's zero. I did not change anything since the tax reform law took effect.


Thanks!

[sailaway]

Compare your actual tax burden between years, not your refund.

The withholding tables changed, so if you did not change your w4, you probably got more money throughout the year. However, comparing the total tax from year to year is the simplest way to figure this out.

[wootwoot]

It sounds like a wash in your case. Early last year they tweaked the withholding amounts so that less has been take out of your paycheck. With the lower brackets and lower withholdings there is a good chance that you're coming out ahead. Look at the total federal tax paid for the year and compare it to last year's numbers.

[TBillT]

The other thing to check is your state return. In my state (Va.), you could also lose on the state side, and you may have to consider not taking the Federal standard deduction, because you may want need to itemize on the state side. In other words, you have to optimize both state and Federal return.

[GordonG]

OK, I think this is making sense. Looks like last year, I did owe more in federal tax. The difference between what I owed then and now is $2640. Also, when the tax laws kicked in back in 2018, I believe my take-home pay increased by about $200 per paycheck (we get paid twice monthly). I'm currently claiming 1 allowance on my W-4, and haven't changed that.

[cusetownusa]

OK, I think this is making sense. Looks like last year, I did owe more in federal tax. The difference between what I owed then and now is $2640. Also, when the tax laws kicked in back in 2018, I believe my take-home pay increased by about $200 per paycheck (we get paid twice monthly). I'm currently claiming 1 allowance on my W-4, and haven't changed that.

Looks like the title of this thread should be changed to the New tax law worked out great for me.

[Silk McCue]

OK, I think this is making sense. Looks like last year, I did owe more in federal tax. The difference between what I owed then and now is $2640. Also, when the tax laws kicked in back in 2018, I believe my take-home pay increased by about $200 per paycheck (we get paid twice monthly). I'm currently claiming 1 allowance on my W-4, and haven't changed that.

Looks like the title of this thread should be changed to the New tax law worked out great for me.

+1

"I started out being harmed and turned out blessed."

Cheers

[JonnyDVM]

I noticed withholdings changed quite a bit. Seems many people are not having enough withheld and end up owing, thus some confusion. Depending on what state you are in the SALT cap can sting a bit, but I can’t imagine that affects the vast majority of filers.

[DaftInvestor]

OK, I think this is making sense. Looks like last year, I did owe more in federal tax. The difference between what I owed then and now is $2640. Also, when the tax laws kicked in back in 2018, I believe my take-home pay increased by about $200 per paycheck (we get paid twice monthly). I'm currently claiming 1 allowance on my W-4, and haven't changed that.

Excellent! You can't just compare deductions/credits between years because most of the tax rates and limits for those rates were lowered (e.g. you are paying less of a percentage of you pay to taxes). Combine this with the fact that most companies changed their withholding (lowering for most) and the only way to tell if your burden increased or decreased is to look at the bottom line.