[2018 tax return - How does it compare to previous years?]

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mighty72
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Re: So, I did my taxes over the weekend

Post by mighty72 » Mon Mar 04, 2019 11:07 am

It would be interested to know which state you are in. I haven't done my taxes yet as waiting on some documents but would think that restrictions on SALT would impact those of us who are in the high SALT states like CA (where I live). It gets worse for those of us who are in VHCOL area like me (SF Bay Area). I will post my data once I do my taxes

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marti038
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Re: So, I did my taxes over the weekend

Post by marti038 » Mon Mar 04, 2019 11:09 am

mighty72 wrote:
Mon Mar 04, 2019 11:07 am
It would be interested to know which state you are in. I haven't done my taxes yet as waiting on some documents but would think that restrictions on SALT would impact those of us who are in the high SALT states like CA (where I live). It gets worse for those of us who are in VHCOL area like me (SF Bay Area). I will post my data once I do my taxes
I'm in Alabama. It's a very inexpensive place to live, especially in terms of state income tax. All the information I posted above was for federal taxes only. No state information was included in the data above.

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serbeer
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Re: So, I did my taxes over the weekend

Post by serbeer » Mon Mar 04, 2019 12:24 pm

I did my taxes this weekend too. The change was favorable to my family, with effective tax rate going down from 22% in last year to 17.7% as calculated by TurboTax. Last time it was that low in 2013 I believe as our income had been growing lately.

As expected, this year I had to take standard deduction, which is too bad as our property taxes alone are pretty close to it (I do not live in mansion, just nice house, but my county is #5 on the list of the most expensive property tax locations in US I think). That said, I still cannot complaint with total tax rate going down...

The biggest kicker is that I added another $100 of income in TT as experiment, and the total federal and state tax jumped by $44. Which means that my marginal tax rate is 44%. Ouch! I should experiment with my 2017 return to confirm, but think it is even higher than I had last year, though AGI went up too this year, so hard to say whether it is attributable to tax law changes or higher income or both.

Update: experimented with my 2017 TT, and marginal tax was 41% last year. I think the difference of 3% can probably be explained by climb in income, so the conclusion is, new tax laws are indeed quite favorable, but in lower tax brackets only--they are lateral to any future income growth, if any as marginal tax remain similar.
Last edited by serbeer on Tue Mar 05, 2019 6:50 pm, edited 1 time in total.

libralibra
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Re: [2018 tax return - How does it compare to previous years?]

Post by libralibra » Tue Mar 05, 2019 12:25 pm

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Re: [2018 tax return - How does it compare to previous years?]

Post by Smoke » Tue Mar 05, 2019 7:13 pm

About the same, I paid no taxes in 2017, I got $3 back.
2018 I paid no taxes, I got $4 back.
This year spouse and I turn 65, so far it seems I can have about 5,000 in extra income Pay no taxes and still break even owing no tax.
Perhaps I will do a 401k to roth rollover of 5k, or just take 5k from my Ira and put it in taxable.
I've got time to think about it.
Arguing for the sake of arguing is something I am not going to engage in.

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Re: [2018 tax return - How does it compare to previous years?]

Post by ram » Tue Mar 05, 2019 11:02 pm

Every year till 2017 I made some cash charitable donations and additional $300 to 1000 worth donations of household goods to goodwill.
In 2017 I set up a donor advised fund and all cash donations during 2018 have come out of that fund.
I have donated about $400 worth household goods to Goodwill in 2018.
My state taxes substantially exceed $10,000.
Should I even bother mentioning the donation to goodwill for the 2018 tax filings. I believe that I will not get any benefit.
Ram

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Re: [2018 tax return - How does it compare to previous years?]

Post by MotoTrojan » Tue Mar 05, 2019 11:37 pm

More money in my pocket.

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Re: [2018 tax return - How does it compare to previous years?]

Post by Gleevec » Tue Mar 05, 2019 11:59 pm

Anyone else in Texas or other high property tax state get hit by SALT cap limit and owe more?

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Re: [2018 tax return - How does it compare to previous years?]

Post by TomatoTomahto » Wed Mar 06, 2019 7:13 am

Gleevec wrote:
Tue Mar 05, 2019 11:59 pm
Anyone else in Texas or other high property tax state get hit by SALT cap limit and owe more?
The SALT cap change swamped the rate change for us. There were many changes in our return year on year, and I haven’t done a proper forensic analysis, but it appears to have cost us roughly 2% overall in effective tax rate.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: [2018 tax return - How does it compare to previous years?]

Post by SC Anteater » Wed Mar 06, 2019 7:28 am

TomatoTomahto wrote:
Wed Mar 06, 2019 7:13 am
Gleevec wrote:
Tue Mar 05, 2019 11:59 pm
Anyone else in Texas or other high property tax state get hit by SALT cap limit and owe more?
The SALT cap change swamped the rate change for us. There were many changes in our return year on year, and I haven’t done a proper forensic analysis, but it appears to have cost us roughly 2% overall in effective tax rate.
Same here.

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Re: [2018 tax return - How does it compare to previous years?]

Post by Marylander1 » Wed Mar 06, 2019 7:50 am

libralibra wrote:
Tue Mar 05, 2019 12:25 pm
People would essentially be voting on which plan they want and it'll very quickly become clear whether the changes were beneficial overall or not.
Of course most people "want" to pay no taxes, receive high services, and ignore the resulting debt. Regardless of whether massive borrowing with no plan to repay is personal or national, I'd think most Bogleheads wouldn't think soaring debt is "beneficial".

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Re: [2018 tax return - How does it compare to previous years?]

Post by chw » Wed Mar 06, 2019 10:10 am

2018 was much lower (zero tax) than 2018 (effective tax rate of 20%). However, hard to compare the 2 years as taxable income dropped in first full year of retirement, and a solar tax credit of 30% on new PV system fully wiped out the tax that would have been due without the credit. Some of the PV tax credit is being carried forward to 2019 tax year.

I did have enough deductions to itemize above the 24K standard deduction (though not by much).

atlgenxennial
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Re: [2018 tax return - How does it compare to previous years?]

Post by atlgenxennial » Wed Mar 06, 2019 10:23 am

I lost some deductions/had some deductions limited, and will ultimately end up owing (and about 5x more than I owed last year). Marginal rate up....

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Re: [2018 tax return - How does it compare to previous years?]

Post by Jack FFR1846 » Wed Mar 06, 2019 10:40 am

Well, just got the package back from the CPA last night. Effective tax rate dropped from 19.5% last year to 16.2% this year.

Some differences: I did a small amount of tax loss harvesting...couple hundred dollars of loss there. I made $20k less, thanks to our company executives screwing up when buying a company, so the entire company's 3rd quarter bonuses all went to zero and I had some tradeline sales that gave me a bit of 1099 income. I stayed completely within the 22% bracket, which the good news is I can do full Roth contributions (yay!). I do see that I had capital gains because I needed very quick funds for a black swan event and sold off some of my taxable.

State tax (MA) went up from 5.1 to 5.57%. All of this was due to cap gains, which are taxed here at 12%.
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Re: [2018 tax return - How does it compare to previous years?]

Post by nfs » Wed Mar 06, 2019 11:24 am

We saw about a 1.5% effective tax rate increase. I would have preferred a savings, but I suppose it could have been worse.

2 income household. One claimed dependent (college student). We itemized both years.

2018
AGI: ~$270k
Taxes: ~$40k
Itemized deduction: $54k (capped by SALT - lost $22k deduction)
Tax bracket: 24%
Effective tax rate: 14.76%

2017
AGI: ~$230k
Taxes: ~$30k
Itemized deduction: $63k
Tax bracket: 28%
Effective tax rate: 13.26%
Last edited by nfs on Wed Mar 06, 2019 3:08 pm, edited 1 time in total.

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Re: Smaller tax refunds this year? Clear explanation please

Post by partner » Wed Mar 06, 2019 11:40 am

Old_Dollar wrote:
Mon Feb 11, 2019 7:24 pm
The lack of distinction between tax burden and tax refund is rather funny. If tax burdens go down then tax refunds will likely go down since withholdings will be less.
My actual fed taxes went down even tho my AGI went up over 10K. But I had to sent them a lot more this year than last (hopefully no penalty). I attribute that to RMD and not as much TLH this year.
State taxes is a whole nother story, every thing went way up.

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Re: [2018 tax return - How does it compare to previous years?]

Post by r3t1r3 » Wed Mar 06, 2019 12:06 pm

nfs wrote:
Wed Mar 06, 2019 11:24 am
We saw about a 1.5% effective tax rate increase. I would have preferred a savings, but I suppose it could have been worse.

2 income household. One claimed dependent (college student). We itemized both years.

2018
AGI: ~$270k
Taxes: ~$40k
Itemized deduction: $63k
Tax bracket: 24%
Effective tax rate: 14.76%

2017
AGI: ~$230k
Taxes: ~$30k
Itemized deduction: $54k (capped by SALT - lost $22k deduction)
Tax bracket: 28%
Effective tax rate: 13.26%


Just trying to get my head around the new tax rules. With the SALT (State and Local taxes) deduction capped at 10K, I am very curious about what else allows folks to go beyond the 24K standard deduction. Beyond SALT what other deductions get you to an itemized deduction of $63K? Mortgage interest and charitable givings?

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Re: [2018 tax return - How does it compare to previous years?]

Post by DrGoogle2017 » Wed Mar 06, 2019 12:20 pm

It’s hard to tell because I have a different tax situation now than previous year. One dependent is no longer dependent, plus I converted more than last year from my IRA to Roth IRA. My income also went up. It would have been a wash if everything else is equal.

libralibra
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Re: [2018 tax return - How does it compare to previous years?]

Post by libralibra » Wed Mar 06, 2019 12:21 pm

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msmorr
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Re: [2018 tax return - How does it compare to previous years?]

Post by msmorr » Wed Mar 06, 2019 12:27 pm

My overall tax went down, but due to the withholding change, I went from a $2200 refund in 2017 to owing $4800 in 2018. They should have communicated more clearly that everyone should have reduced their withholding allowances (I was a "1" in 2018...just changed to 0 for 2019).

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Re: [2018 tax return - How does it compare to previous years?]

Post by BuckyBadger » Wed Mar 06, 2019 12:32 pm

I need to look into it again, because we seem to be owing way more... Our withholding was decreased slightly automatically, but we had a baby in 2018 so I figured it would sort of come out in the wash - but we own something like $4,000.

Last year was the first time I did a hand calc on a spreadsheet, but I feel like maybe I missed something, because my spreadsheet seemed to indicate we'd be getting a small refund.

I need to dig into it, but it does NOT look like a good change for us personally. It's hard to tell though because we had changes in baby, and minor raises.

But I'm really confused about my deductions. we are taking the standard deduction this year and itemized last year, and TurboTax says we had $37k of itemized deductions last year but I'm a little confused about how they came up with that amount. We don't pay a ton in mortgage interest so I don't think it's that...

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Re: [2018 tax return - How does it compare to previous years?]

Post by DrGoogle2017 » Wed Mar 06, 2019 1:08 pm

BuckyBadger wrote:
Wed Mar 06, 2019 12:32 pm
I need to look into it again, because we seem to be owing way more... Our withholding was decreased slightly automatically, but we had a baby in 2018 so I figured it would sort of come out in the wash - but we own something like $4,000.

Last year was the first time I did a hand calc on a spreadsheet, but I feel like maybe I missed something, because my spreadsheet seemed to indicate we'd be getting a small refund.

I need to dig into it, but it does NOT look like a good change for us personally. It's hard to tell though because we had changes in baby, and minor raises.

But I'm really confused about my deductions. we are taking the standard deduction this year and itemized last year, and TurboTax says we had $37k of itemized deductions last year but I'm a little confused about how they came up with that amount. We don't pay a ton in mortgage interest so I don't think it's that...
You might check your tax, TT was wrong about our itemized deductions, that’s why I returned mine yesterday.

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Re: [2018 tax return - How does it compare to previous years?]

Post by BuckyBadger » Wed Mar 06, 2019 2:36 pm

DrGoogle2017 wrote:
Wed Mar 06, 2019 1:08 pm
BuckyBadger wrote:
Wed Mar 06, 2019 12:32 pm
I need to look into it again, because we seem to be owing way more... Our withholding was decreased slightly automatically, but we had a baby in 2018 so I figured it would sort of come out in the wash - but we own something like $4,000.

Last year was the first time I did a hand calc on a spreadsheet, but I feel like maybe I missed something, because my spreadsheet seemed to indicate we'd be getting a small refund.

I need to dig into it, but it does NOT look like a good change for us personally. It's hard to tell though because we had changes in baby, and minor raises.

But I'm really confused about my deductions. we are taking the standard deduction this year and itemized last year, and TurboTax says we had $37k of itemized deductions last year but I'm a little confused about how they came up with that amount. We don't pay a ton in mortgage interest so I don't think it's that...
You might check your tax, TT was wrong about our itemized deductions, that’s why I returned mine yesterday.
How did you manage to see the deductions it was itemizing? Now that it's told me the standard deduction would be better i can't seem to figure out how to go back and force it to look at itemized deductions again!

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Re: [2018 tax return - How does it compare to previous years?]

Post by nfs » Wed Mar 06, 2019 3:08 pm

r3t1r3 wrote:
Wed Mar 06, 2019 12:06 pm
Just trying to get my head around the new tax rules. With the SALT (State and Local taxes) deduction capped at 10K, I am very curious about what else allows folks to go beyond the 24K standard deduction. Beyond SALT what other deductions get you to an itemized deduction of $63K? Mortgage interest and charitable givings?
SALT + mortgage interest + charitable giving for us.

(Eep - looks like I messed up which year I put the deductions in for our - our itemized went DOWN this year (will update my initial post) because of the SALT cap.)

When SALT wasn't capped we had at least $30k in SALT ($12-14k for property tax, plus state tax for the state where we work) and the rest was split between mortgage and charitable giving. We refinanced a bit ago, so for the moment our mortgage interest is a higher than it was a few years ago.

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Re: [2018 tax return - How does it compare to previous years?]

Post by bgyt » Wed Mar 06, 2019 3:39 pm

EXEMPTIONS EXEMPTIONS EXEMPTIONS

$200K AGI Family. I got hammered on 2018 taxes with the loss of the Exemptions for the kids due to still being in the Itemized Deductions class vs. Standard Deduction. Essentially if you Itemize, that exemptions gone with no offset. If you are Standard Deduction class, you get an offset from the higher Standard Deduction limit.

Wondering if I did something wrong. Anyone else see this effect?

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Re: [2018 tax return - How does it compare to previous years?]

Post by Gleevec » Wed Mar 06, 2019 3:40 pm

TomatoTomahto wrote:
Wed Mar 06, 2019 7:13 am
Gleevec wrote:
Tue Mar 05, 2019 11:59 pm
Anyone else in Texas or other high property tax state get hit by SALT cap limit and owe more?
The SALT cap change swamped the rate change for us. There were many changes in our return year on year, and I haven’t done a proper forensic analysis, but it appears to have cost us roughly 2% overall in effective tax rate.
I have a theory that the SALT cap is going to unfortunately hit Texas and some of the other high property tax (but no state tax) states since housing has gone up and property tax rates high and doesn’t take much to clear $10k just on property tax

I also have a pet theory that some of the no state tax but high property tax states may surprisingly become more competitive in 2020 because of this

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Re: [2018 tax return - How does it compare to previous years?]

Post by TomatoTomahto » Wed Mar 06, 2019 4:03 pm

Gleevec wrote:
Wed Mar 06, 2019 3:40 pm
TomatoTomahto wrote:
Wed Mar 06, 2019 7:13 am
Gleevec wrote:
Tue Mar 05, 2019 11:59 pm
Anyone else in Texas or other high property tax state get hit by SALT cap limit and owe more?
The SALT cap change swamped the rate change for us. There were many changes in our return year on year, and I haven’t done a proper forensic analysis, but it appears to have cost us roughly 2% overall in effective tax rate.
I have a theory that the SALT cap is going to unfortunately hit Texas and some of the other high property tax (but no state tax) states since housing has gone up and property tax rates high and doesn’t take much to clear $10k just on property tax
I also have a pet theory that some of the no state tax but high property tax states may surprisingly become more competitive in 2020 because of this
We were in NJ and Massachusetts, with high income taxes and property taxes. I like your pet (theory). :D
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: [2018 tax return - How does it compare to previous years?]

Post by trueblueky » Wed Mar 06, 2019 4:04 pm

Charlieville wrote:
Tue Mar 05, 2019 11:12 pm
Stop saying 40% of the country doesn't pay taxes. FICA taxes are taxes and paid by these so called 40% of wages earners and applied to 100% of their wages. Sales taxes are taxes paying rent but not get a tax break on property taxes like a landlord is a tax too.
I was never able to totally figure out the rental situation. Landlord gets tax breaks and pay property tax. Somehow, those go into the rent charged, as the market adjusts. If the landlord is in a higher bracket than the renter, is that good for the renter?

Cys254
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Re: [2018 tax return - How does it compare to previous years?]

Post by Cys254 » Wed Mar 06, 2019 4:22 pm

My tax went down this year, simply because the dread AMT is gone. Exclude AMT, tax actually went up a bit. I also lost about 14k SALT deduction.

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Re: [2018 tax return - How does it compare to previous years?]

Post by DrGoogle2017 » Wed Mar 06, 2019 4:34 pm

BuckyBadger wrote:
Wed Mar 06, 2019 2:36 pm
DrGoogle2017 wrote:
Wed Mar 06, 2019 1:08 pm
BuckyBadger wrote:
Wed Mar 06, 2019 12:32 pm
I need to look into it again, because we seem to be owing way more... Our withholding was decreased slightly automatically, but we had a baby in 2018 so I figured it would sort of come out in the wash - but we own something like $4,000.

Last year was the first time I did a hand calc on a spreadsheet, but I feel like maybe I missed something, because my spreadsheet seemed to indicate we'd be getting a small refund.

I need to dig into it, but it does NOT look like a good change for us personally. It's hard to tell though because we had changes in baby, and minor raises.

But I'm really confused about my deductions. we are taking the standard deduction this year and itemized last year, and TurboTax says we had $37k of itemized deductions last year but I'm a little confused about how they came up with that amount. We don't pay a ton in mortgage interest so I don't think it's that...
You might check your tax, TT was wrong about our itemized deductions, that’s why I returned mine yesterday.
How did you manage to see the deductions it was itemizing? Now that it's told me the standard deduction would be better i can't seem to figure out how to go back and force it to look at itemized deductions again!
Mine was in schedule A. But you can click go to source.

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Re: [2018 tax return - How does it compare to previous years?]

Post by LadyGeek » Wed Mar 06, 2019 4:44 pm

This is a "no politics" forum. I removed some off-topic posts. As a reminder, see: Politics and Religion
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
  • Common religious expressions such as sending your prayers to an ailing member.
  • Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
  • Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
  • Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
Please stay on-topic, which is about your tax return.
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Re: [2018 tax return - How does it compare to previous years?]

Post by mervinj7 » Wed Mar 06, 2019 5:11 pm

r3t1r3 wrote:
Wed Mar 06, 2019 12:06 pm
Just trying to get my head around the new tax rules. With the SALT (State and Local taxes) deduction capped at 10K, I am very curious about what else allows folks to go beyond the 24K standard deduction. Beyond SALT what other deductions get you to an itemized deduction of $63K? Mortgage interest and charitable givings?
Yes to both. $10k SALT, $32k mortgage interest ($850k mortgage at 3.75%), $11k charity adds easily to $53k. Note, this 2017 mortgage is grandfathered in at the old $1M limit. To get to $63k like nfs, add another $10k in charitable donations.

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Re: [2018 tax return - How does it compare to previous years?]

Post by libralibra » Wed Mar 06, 2019 5:24 pm

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Re: [2018 tax return - How does it compare to previous years?]

Post by munemaker » Wed Mar 06, 2019 5:36 pm

Marylander1 wrote:
Wed Mar 06, 2019 7:50 am
libralibra wrote:
Tue Mar 05, 2019 12:25 pm
People would essentially be voting on which plan they want and it'll very quickly become clear whether the changes were beneficial overall or not.
Of course most people "want" to pay no taxes, receive high services, and ignore the resulting debt. Regardless of whether massive borrowing with no plan to repay is personal or national, I'd think most Bogleheads wouldn't think soaring debt is "beneficial".

Marylander1
What does this have to do with the topic: "2018 tax return - How does it compare to previous years?"

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FiveK
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Re: [2018 tax return - How does it compare to previous years?]

Post by FiveK » Wed Mar 06, 2019 5:52 pm

munemaker wrote:
Wed Mar 06, 2019 5:36 pm
What does this have to do with the topic: "2018 tax return - How does it compare to previous years?"
Occasionally people mistake the Bogleheads forum for https://forum.mrmoneymustache.com/off-topic/.

ladycat
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Re: [2018 tax return - How does it compare to previous years?]

Post by ladycat » Thu Mar 07, 2019 12:54 am

Not much change for us. Our effective tax rate was 1.5% lower for federal and 0.47% higher for state (CA).

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curiouskitty
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Re: [2018 tax return - How does it compare to previous years?]

Post by curiouskitty » Thu Mar 07, 2019 1:30 am

serbeer wrote:
Wed Feb 13, 2019 12:47 am
curiouskitty wrote:
Wed Feb 13, 2019 12:37 am
CA resident so predictably I paid more taxes. I no longer get to itemize which saves a few minutes but adds to my tax bill.

I also had a side business and went the lazy way as a sole proprietor. Big mistake as I didn’t qualify for the 20% rate and got destroyed on high tax rates plus self employment tax
What does solo proprietorship has to do with eligibility for 20% QBI deduction, which is what I assume you mean under 20% rate?
As a sole proprietor, I would have paid a reasonable rate if eligible for QBI but it was a one year second job that phased me out of QBI.

If I had instead incorporated, I could have taken the 21% corporate tax rate instead of individual income tax rates (35% in this case)

In other words, I didn’t qualify for the 20% rate that was advertised so I ended up paying a lot more than I expected or needed to.

GeraniumLover
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Re: [2018 tax return - How does it compare to previous years?]

Post by GeraniumLover » Thu Mar 07, 2019 10:14 am

My mother's effective tax rate dropped from 17% in 2017 to 16% in 2018 despite her taxable income increasing by 37% (primarily due to long term capital gains and lower itemized deductions).

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Re: [2018 tax return - How does it compare to previous years?]

Post by RadAudit » Thu Mar 07, 2019 1:40 pm

Compared to 2017, in 2018: Income was up. Taxes were down. Tax returns were higher than they should of been because I over withheld.
Last edited by RadAudit on Thu Mar 07, 2019 9:33 pm, edited 1 time in total.
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Re: [2018 tax return - How does it compare to previous years?]

Post by r3t1r3 » Thu Mar 07, 2019 1:47 pm

mervinj7 wrote:
Wed Mar 06, 2019 5:11 pm
r3t1r3 wrote:
Wed Mar 06, 2019 12:06 pm
Just trying to get my head around the new tax rules. With the SALT (State and Local taxes) deduction capped at 10K, I am very curious about what else allows folks to go beyond the 24K standard deduction. Beyond SALT what other deductions get you to an itemized deduction of $63K? Mortgage interest and charitable givings?
Yes to both. $10k SALT, $32k mortgage interest ($850k mortgage at 3.75%), $11k charity adds easily to $53k. Note, this 2017 mortgage is grandfathered in at the old $1M limit. To get to $63k like nfs, add another $10k in charitable donations.
Thanks a lot for taking the time to reply. Appreciate it.

r3t1r3
Posts: 17
Joined: Wed Mar 06, 2019 12:00 pm

Re: [2018 tax return - How does it compare to previous years?]

Post by r3t1r3 » Thu Mar 07, 2019 1:48 pm

nfs wrote:
Wed Mar 06, 2019 3:08 pm
r3t1r3 wrote:
Wed Mar 06, 2019 12:06 pm
Just trying to get my head around the new tax rules. With the SALT (State and Local taxes) deduction capped at 10K, I am very curious about what else allows folks to go beyond the 24K standard deduction. Beyond SALT what other deductions get you to an itemized deduction of $63K? Mortgage interest and charitable givings?
SALT + mortgage interest + charitable giving for us.

(Eep - looks like I messed up which year I put the deductions in for our - our itemized went DOWN this year (will update my initial post) because of the SALT cap.)

When SALT wasn't capped we had at least $30k in SALT ($12-14k for property tax, plus state tax for the state where we work) and the rest was split between mortgage and charitable giving. We refinanced a bit ago, so for the moment our mortgage interest is a higher than it was a few years ago.
Thanks a lot for taking the time to reply. Appreciate it.

Grogs
Posts: 516
Joined: Tue Mar 24, 2015 4:55 pm

Re: [2018 tax return - How does it compare to previous years?]

Post by Grogs » Thu Mar 07, 2019 6:04 pm

I live in a low tax state, so SALT isn't an issue. Still, I was itemizing for ~10k, so about 14.2k with the exemption. Dropping back to 12k cost about $500 in the 24% bracket. The lower tax brackets more than made up for that loss though. I calculated my taxes using both the old and the new system, and it looks like my tax dropped about 1.4% of gross income. The rate went from about 15% to 13.6% under the new law.

sixty40
Posts: 257
Joined: Sat Dec 06, 2014 11:53 am

Re: [2018 tax return - How does it compare to previous years?]

Post by sixty40 » Thu Mar 07, 2019 6:27 pm

Was pleasantly surprised that my fed tax dropped 19% from last year with practically the same AGI & Taxable Income compared to 2017. Anyone else in CA have this outcome?

Live in CA, no mortgage, 2 kids with one younger than 17, MFJ.
2018 AGI is practically the same as 2017 AGI, less than 1% difference.
2018 Taxable income (TI) was 6% higher than 2017 TI.
No AMT in 2018, but had AMT in 2017.
2018 AGI & TI in 32% tax bracket.
Maxed out SALT at $10k
Standard deduction at $24k.
Got $5500 in tax credits where in 2017 got $170 in credits, and did nothing different in 2018.

My substantially lower fed tax seems to be attributed to no AMT, lower tax rates, and the tax credit.
Hope others in similar situation have a similar outcome.

bling
Posts: 362
Joined: Sat Jan 21, 2012 12:49 pm

Re: [2018 tax return - How does it compare to previous years?]

Post by bling » Thu Mar 07, 2019 8:08 pm

using 'total tax' / 'agi' (line 18 / line 7) my effective tax came out to be 16% this year. previous years it hovered around 12%, so the new law was not good for me.

simas
Posts: 465
Joined: Wed Apr 04, 2007 5:50 pm

Re: [2018 tax return - How does it compare to previous years?]

Post by simas » Fri Mar 08, 2019 8:05 am

State - IL

AGI went up, rate went down.

AGI Tax Due Rate
2017 141219 30424 21.54%
2018 202234 37696 18.64%

brokendirtdart
Posts: 171
Joined: Mon Jan 02, 2017 8:27 pm
Location: USA!

Re: [2018 tax return - How does it compare to previous years?]

Post by brokendirtdart » Fri Mar 08, 2019 8:22 am

Just finished mine last night. In my case, military senior enlisted, single filer, no state tax, not a property owner, my effective tax rate went down from 14.7% in 2017 to 13.3% in 2018. My AGI was up over 6K this year.

While I am still writing a check, I am paying less. Where I screwed up is I owed an underpayment penalty of $51 this year. I guess I'll set reminders on my calendar to pay the estimated taxes in 2019.

MikeG62
Posts: 2247
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: [2018 tax return - How does it compare to previous years?]

Post by MikeG62 » Fri Mar 08, 2019 9:19 am

bgyt wrote:
Wed Mar 06, 2019 3:39 pm
EXEMPTIONS EXEMPTIONS EXEMPTIONS

$200K AGI Family. I got hammered on 2018 taxes with the loss of the Exemptions for the kids due to still being in the Itemized Deductions class vs. Standard Deduction. Essentially if you Itemize, that exemptions gone with no offset. If you are Standard Deduction class, you get an offset from the higher Standard Deduction limit.

Wondering if I did something wrong. Anyone else see this effect?
There is at least a partial, if not full (or more than full), offset coming from the lower tax rates themselves. It really comes down to how large your itemized (mainly SALT) deduction was in the past.
Real Knowledge Comes Only From Experience

fru-gal
Posts: 1194
Joined: Wed Jan 02, 2019 9:48 pm
Location: New England

Re: Tax 2018: Shock and Awe

Post by fru-gal » Fri Mar 08, 2019 9:58 am

iceport wrote:
Tue Feb 12, 2019 1:27 pm
PinotGris wrote:
Tue Feb 12, 2019 12:02 pm
The form is indeed a post card size, just the bottom half of a sheet.

How are YOU doing?
Not as good as you!

I haven't figured my final tax liability yet, but my tax return bulked up from prior years:

2017:
Form 1040 (2 full sides)
Schedule A
Schedule B
Schedule D
Schedule E
Form 8582

2018:
Form 1040 (1 half side)
Schedule 1
Schedule 3
Schedule 5
Schedule B
Schedule D
Schedule E
Form 8582
(This doesn't include additional forms required to document a Roth conversion and some TLH, which were not involved last year.)

What a pointless, childish tax form revision that has only served to make more work for everyone involved. Clearly, any claim of "simplification" is fake.

Bravo!
Yes, normally by now as I have all my stuff calced up, I could spend half an hour filling out the 1040, Scheds A and B, 8606 and be done with the federal stuff. Now I have to wend my way through this pointless revision that exists only to support that postcard crap.

stoptothink
Posts: 6545
Joined: Fri Dec 31, 2010 9:53 am

Re: [2018 tax return - How does it compare to previous years?]

Post by stoptothink » Fri Mar 08, 2019 10:36 am

Income was up ~10% and taxes increased proportionally. What was odd is that combined we (wife and I) claim 1 for state, and we have 2 children (so MFJ with 2 dependents), and if it wasn't for just under $400 in 529 credits we would have owed almost $300. I am going to have to play with some calculators; that made no sense. It wouldn't shock me if my wife's payroll messed something up.

JuniorBH
Posts: 130
Joined: Fri Jun 09, 2017 12:54 pm

Re: [2018 tax return - How does it compare to previous years?]

Post by JuniorBH » Fri Mar 08, 2019 1:34 pm

Effective tax rate went down from 28.5% to 24.8%. Also, we just barely dipped into the alternative minimum last year, so I imagine we would have really been into it this year under the new rules.

Quick takeaways:

- SALT deduction change cut itemized deductions almost in half, but we still itemized as the combo of mortgage interest and $10K SALT put us over the standard deduction
- Tax credits for two kids and the lower brackets seems to have helped, along with the changes to the alternative minimum (i.e. we no longer qualify).

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