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

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

Post by LadyGeek » Tue Apr 16, 2019 3:46 pm

I removed an off-topic interchange regarding "Warren Buffet's Dream" and the obligation of wealthy persons to pay taxes. The discussion was getting derailed.

Please stay on topic, which is your own tax situation.
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Re: [2018 tax return - How does it compare to previous years?]

Post by 22twain » Tue Apr 16, 2019 4:30 pm

2017
AGI $54,700
Fed taxable $32,700
Fed tax $1200
State taxable $16,100
State tax $700

2018
AGI $47,700
Fed taxable $22,300
Fed tax $450
State taxable $5,000
State tax $50

The past two years, we were in an income "trough" between my retirement two years ago and DW's starting SS and RMDs at age 70 this year.

About half the decrease in Federal taxable income comes from DW teaching part-time for only one semester last year instead of two. The other half comes from the increased standard deduction; even before the new tax law, we had been using the old standard deduction for a few years. Our state has a significant senior citizens' income exclusion.

Our AGI for this year will be about double last year's, because of DW's SS and RMDs. In a few years it will increase again by about 50% because of my SS and RMDs.
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Re: [2018 tax return - How does it compare to previous years?]

Post by Hydromod » Tue Apr 16, 2019 11:38 pm

MFJ

2017
AGI: 213k
fed tax: 37.1k
effective tax rate: 17.4

2018
AGI: 240k
fed tax: 37.3k
effective tax rate: 15.5

no state tax

Just for grins I fit a smooth curve through the marginal tax implied by the brackets, assuming no capital gains, no social security, and the standard deduction. The formula is

marginal tax = A * max(0, log(AGI/AGI0))^(4/3)

A is 0.14 for 2018, 0.13 for 2017
AGI0 = 9k for 2018, 18k for 2018

This fits pretty well up to about 1MM.

Basically the same curves, with slightly different slopes and an offset according to the changed deductions.

This seems pretty consistent with the discussion in the entries, which show a general decrease in effective tax rate unless (i) the new standard deduction is less than a previous itemized deduction or (ii) state/local taxes didn't play nice.

Wouldn't it be nice if we could simply think about smooth effective tax curves rather than marginal tax brackets. Would make modeling and planning simpler for sure.

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

Post by Alan S. » Wed Apr 17, 2019 12:16 pm

MFJ - federal figures only

2018 AGI up 12.1% from 2017.
2018 taxable income up 11.6%
2018 tax liability down .6%.

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

Post by kinless » Wed Apr 17, 2019 1:20 pm

For me it was more challenging to gauge the efficacy of the TCJA due to a combination of large income and deduction adjustments.

Prior to the start of 2018, I paid ahead CA property taxes in order to use towards 2017 deductions and avoid the new 10k SALT cap for this round. 2018 was also the first year I made contributions to a SEP and HSA. We all lost the personal exemption, but due to my side business gained the Qualified Business Income (QBI) deduction. All these strategies would explain the sizable shift in deductions and adjustments between the two years.

Income is from both W-2 and 1099s. Figures don't include self-employment tax.

2017 (Filing Single)
Income: 86,927 (Total) - 6,826 (Adjustments) = 80,101 (AGI)
Deductions: 26,045 (Itemized) + 4,050 (Exemption) = 30,095
Totals: 50,006 (Taxable): 8,245 Federal / 2,599 CA State
Federal: 25% bracket / 10.29% effective
State: 9.3% bracket / 3.28% effective

2018 (Filing Single)
Income: 100,011 (Total) - 12,572 (Adjustments) = 87,439 (AGI)
Deductions: 18,873 (Itemized) + 1,666 (QBI) = 20,539
Totals: 66,900 (Taxable): 10,663 Federal / 4,315 CA State
Federal: 22% bracket / 12.19% effective
State: 9.3% bracket / 4.75% effective

Just looking at the tax tables, potential savings could have been around $1,800 due to the TCJA, but there's obviously more to it than that. I can't escape the SALT cap for 2019 and beyond, which will keep itemized deductions below $20k so the 2018 tax year is a better indicator of the future, assuming income stays the same.

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

Post by Harry Livermore » Wed Apr 17, 2019 6:22 pm

I posted this information in another thread but thought I'd contribute here:
Married Filing Jointly.
Like some others here, we used the standard deduction for the first time in almost 30 years. I knew it was going to be a rough go this year, and it was about as I expected. Our 2017 Schedule A itemized deductions were a little over $40K. 5 members in our household yielded $20,250 in personal exemptions. So we had almost $61K of deductions in 2017 that went away for 2018, to be replaced by the $24K "standard deduction" and $2K child tax credit (only 2 in the household are under 18)
2017 AGI +/- $281K= $41K "total tax" (line 63) 14.59% effective tax rate
2018 AGI +/- $219K= $43K "total tax" (line 15) 19.63% effective tax rate
There are many moving parts (we had a very large cap gain in 2017, and I had a very large 179 business equipment purchase in 2017, my Keough contributions were different year-over-year) so it's hard to do a true comparison. But AGI seems like the correct starting point, no? It would seem the elimination of personal exemptions and SALT was a major ding for us, as expected. On the bright side, I was able to take the 199A QBD on the business deduction, and that helped (not a lot as evidenced by the effective tax rate) And for the first time in 20 years, we did not owe the AMT (although the effective tax rate was lower in 2017 even with the AMT)
Cheers

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

Post by FiveK » Wed Apr 17, 2019 7:25 pm

Harry Livermore wrote:
Wed Apr 17, 2019 6:22 pm
There are many moving parts (we had a very large cap gain in 2017, and I had a very large 179 business equipment purchase in 2017, my Keough contributions were different year-over-year) so it's hard to do a true comparison. But AGI seems like the correct starting point, no?
No. Not with capital gains having a much different tax rate than ordinary income.

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

Post by DinkinFlicka » Wed Apr 17, 2019 8:52 pm

Single both years. Compared to 2017:

Moved to 24% bracket from 28%
AGI: +6.1%
Taxable Income: +8.7%
Total Tax: -3.0%

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

Post by Harry Livermore » Thu Apr 18, 2019 5:46 am

FiveK wrote:
Wed Apr 17, 2019 7:25 pm
Harry Livermore wrote:
Wed Apr 17, 2019 6:22 pm
There are many moving parts (we had a very large cap gain in 2017, and I had a very large 179 business equipment purchase in 2017, my Keough contributions were different year-over-year) so it's hard to do a true comparison. But AGI seems like the correct starting point, no?
No. Not with capital gains having a much different tax rate than ordinary income.
True.
Also, the large 179 deduction in 2017 meant a very small business net. So we paid a great deal more SE tax in 2018 as well.
Too many moving parts for me to be an effective data point.
I guess I could have the CPA run 2018 under the 2017 law, and vice versa. But why pay him to come up with a meaningless conclusion?
It feels like the SALT cap and the $4K/ person exclusion meant higher AGI, and more tax, but the AMT relief meant lower added tax.
I agree with other posters that the change from the efficient, data-rich old 1040 to the new "postcard" with 6 extra pages of schedules is wildly inefficient, and a very ill-conceived stunt.
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Re: [2018 tax return - How does it compare to previous years?]

Post by geobrick » Fri Apr 19, 2019 11:52 am

I think the best way to know if the new tax law increased or decreased your tax burden is to do an apples to apples comparison. Either plug your 2017 numbers into a 2018 return or plug your 2018 number into a 2017 return. It takes a bit of work since you have to fill out two tax returns but it's the only way to remove income and deduction variables between the two years.

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

Post by AerialWombat » Fri Apr 19, 2019 1:13 pm

Basically, my income doubled and my effective tax rate went down substantially.

I’m not complaining.

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

Post by Jon » Fri Apr 19, 2019 1:35 pm

I earned more in 2018 than any prior year (low six figures), but had the lowest effective income tax rate I’ve ever had (-1.5%, and yes, that’s *negative*). Still paid about $15K in self-employment taxes, but I don’t think that’s particularly relevant to what’s being asked here.

The child tax credit increase was definitely a factor in my effective income tax rate bring so low. Also, the doubling of the standard deduction made 2018 the first year in many that we did not itemize.

There were no unpleasant surprises on tax day because, being self-employed, I’m responsible for my own “withholding” and pay close attention to it. I actually ended up saving about $3K too much toward taxes.

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

Post by Hitchcock_Fan » Fri Apr 19, 2019 8:26 pm

Difference between 2017 and 2018:
- Taxable Income: up $36,000
- Total Tax: down $1,300
- Effective Tax Rate: down 2%

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

Post by cwwolf » Sat Apr 20, 2019 1:23 pm

1. I have always had too much withheld from taxes. It used to be thought of as an end of the year "bonus" for me. When I got married, the wife like it too since it forced us to "save" and have a chunk of money come back to us.

2. My refund has always been $7,000-$9,000. Yes yes yes, I know, way too much.

So that in mind, we knew the tax changes were going to affect us, but we were on the cusp. We itemized ~$26,000, and have 3 kids. So with the cap we lost about $2,000, and with the child credit we gained $3,000. Ultimately we had $1500 more than last year.

All that being said, and with $53K in CC debt, I've been playing with withholding this year to bring the refund as close to $0 this year as I can and putting all that money to more immediate use in paying off the debt. I have found though that the state refund is nearly impossible to get to $0. It was $2,243 refund with Married 4. I changed it to married 5, and only changed the withholding from bi-weekly check by $2.50.

The federal was set at 5, and I changed it to 9. It only gave back $77.54 a paycheck and based on refund I need to change the paycheck by $209 total. So each paycheck I am changing my withholding until I get it where I have the smallest refund. Next year will be even more of a headache because I will be enrolling in a FSA, as well as probably getting ready to contribute to a 457(b) for the first time, so I will need to keep a careful eye on that.

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How did you feel about your 2018 tax returns?

Post by boglechu » Mon Apr 22, 2019 11:35 am

[Thread merged into here, see below (next page) --admin LadyGeek]

I thought it was simpler than last year’s taxes in the sense that my main deductions were mortgage interest, child tax credit, and $10,000 for state and local taxes. I did lose out on deducting all of my state and local taxes.

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Re: How did you feel about your 2018 tax returns?

Post by bloom2708 » Mon Apr 22, 2019 11:38 am

Your mortgage interest alone was over $24k?

If so, your itemizing is only above the $24k mark. Assuming married/joint.

If you paid $30k in interest, you got a $6k x marginal rate benefit over someone under the baseline standard deduction.

I didn't notice much of a difference. A bit less tax paid for 2018. A bit less tax withheld. No itemizing again with the new larger standard deduction.
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Re: How did you feel about your 2018 tax returns?

Post by mega317 » Mon Apr 22, 2019 11:41 am

boglechu wrote:
Mon Apr 22, 2019 11:35 am
I thought it was simpler than last year’s taxes in the sense that my main deductions were mortgage interest, child tax credit, and $10,000 for state and local taxes. I did lose out on deducting all of my state and local taxes.
How was it simpler?
https://www.bogleheads.org/forum/viewtopic.php?t=6212

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Re: How did you feel about your 2018 tax returns?

Post by Creditcardguy » Mon Apr 22, 2019 11:47 am

As a small business owner, my taxes went down substantially. I was happy, happy, happy. :D

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Re: How did you feel about your 2018 tax returns?

Post by jpelder » Mon Apr 22, 2019 11:52 am

My witholdings were way off this year (I owed ~$1000 federal tax and ~$300 state tax). My actual tax liability was a slightly lower amount in 2018 vs 2017
That said, we took a first home purchase withdrawal from a Roth IRA, and therefore did not qualify for the Retirement Saver's Credit, which we have qualified for over the past several years. We still would have owed close to $400 in Federal and $300 State with that credit.

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Re: How did you feel about your 2018 tax returns?

Post by mhc » Mon Apr 22, 2019 11:58 am

I like that I was able to avoid the complexity of AMT. Otherwise, the process was about the same. TurboTax didn't really change. Some of the forms were different, but that's no big deal. I really like the large reduction in tax burden.

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Re: How did you feel about your 2018 tax returns?

Post by 9-5 Suited » Mon Apr 22, 2019 12:00 pm

Process was about the same, maybe a bit easier due to taking standard deduction. But I am one of the people who lost out due to high mortgage interest and SALT, so I'd have preferred to do a little more work :)

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Re: How did you feel about your 2018 tax returns?

Post by vitaflo » Mon Apr 22, 2019 12:00 pm

Creditcardguy wrote:
Mon Apr 22, 2019 11:47 am
As a small business owner, my taxes went down substantially. I was happy, happy, happy. :D
Same. The QBI deduction is ridiculous.

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Re: How did you feel about your 2018 tax returns?

Post by delamer » Mon Apr 22, 2019 12:02 pm

I use TurboTax so my experience was pretty much the same as 2017, except that I did some TLH IN 2018.

Total liability was about $1200 lower than if the 2017 federal law had been in place, because state taxes went up a bit due to losing any advantage to itemizing.

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munemaker
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Re: How did you feel about your 2018 tax returns?

Post by munemaker » Mon Apr 22, 2019 12:02 pm

Since we owed zero federal income tax, felt very good about out 2017 and 2018 returns (I don't mean zero at filing. I mean zero for the tax year.)!

That ends in 2019 when we will be doing massive Roth conversions. But I will still feel very good about making large Roth conversions at the lower rate before the rates go back up.

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Re: How did you feel about your 2018 tax returns?

Post by Mike Scott » Mon Apr 22, 2019 12:09 pm

I did not like paying more taxes on less income compared to previous years. The change in exemption/deductions meant more complexity trying to "bunch" itemized deductions in alternate years.

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Re: How did you feel about your 2018 tax returns?

Post by DonIce » Mon Apr 22, 2019 12:12 pm

Federal tax rate went from 15.2% to 14.3% on essentially the same income. Complexity was unchanged. Can't say I mind the extra ~$1000 but not a big deal either way.

Removing the personal exemption means I can deduct less. The new standard deduction is more than the old standard deduction + personal exemption. But for those of us that itemize, the personal exemption being removed kind of sucks. Fortunately the tax rates were reduced enough to more than compensate.

Overall I'm sure a lot more people are going with the standard deduction now which simplifies it for a lot of people.

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Re: How did you feel about your 2018 tax returns?

Post by Goal33 » Mon Apr 22, 2019 12:13 pm

Was disappointing because even though I now take standard deduction for federal, for CA sake, I have to still go through the whole process of itemizing.
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Re: How did you feel about your 2018 tax returns?

Post by nisiprius » Mon Apr 22, 2019 12:19 pm

Resentful that Form 1040, which used to a be a single two-sided page, is now splattered across seven pages, most of them half-empty. Yes, I use tax-prep software, but it affects me because part of my preparation process is a final check, using a spreadsheet, to compare simple totals from my forms to my income reported on W2's and 1099s, and now many line numbers of changed, many items once listed separately on 1040s are now combined into totals so I must go to the "schedules" to seem the broken out, and I can no longer spread the whole thing out on my desk and review it all at a glance.

Took me a couple of extra hours this year to deal with renumbered lines and restructured totals in my personal final cross-check procedure. Hopefully they won't mess with it again and it won't take as long next year.

I think the purpose of this whole stupid charade must be to justify blocking ReadyReturn, the California pilot experiment, in which people got their tax forms with all of the information known to the IRS already filled in.
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Re: How did you feel about your 2018 tax returns?

Post by Random Poster » Mon Apr 22, 2019 12:21 pm

I thought that the base 1040 and accompanying schedules made for a much more confusing tax preparation experience, and I greatly prefer the previous 1040 version. Kept feeling like I was missing something or making a mistake somewhere.

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Re: How did you feel about your 2018 tax returns?

Post by Nate79 » Mon Apr 22, 2019 12:27 pm

Input into freetaxusa.com seemed mostly the same as last year. So no difference felt at all.

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Re: How did you feel about your 2018 tax returns?

Post by montanagirl » Mon Apr 22, 2019 12:34 pm

Our standard deduction went up a little bit so we paid zero federal tax even though I did take some distributions and made some Roth conversions.

We still itemize on the state level though we never did for federal.

I worked for Major Tax Retailer for six weeks before quitting once and for all.. People were not happy and I did not feel prepared for the QBI deduction. The final regs came out rather late and seemed to catch everyone flat footed. Not that we do a lot of business returns but that makes it even worse if it's not something you do every day.

So I retired.. :beer

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Re: How did you feel about your 2018 tax returns?

Post by ray.james » Mon Apr 22, 2019 12:40 pm

We are in sweet spot, kids now eligible for credits, no home in high tax state, long ramp of 24% bracket.

I like the standard deduction aspect which expanded to more than 85% of population. As a policy standpoint, I would have loved for removal of mortgage deduction completely forcing only medical/environmental catastrophic to file itemized deductions. It would simplify taxes the most.
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Re: How did you feel about your 2018 tax returns?

Post by CT-Scott » Mon Apr 22, 2019 12:58 pm

The process was no harder for me, as I used H&R Block software, just as I had done the last two years. I've "owed" the Federal government a few grand the last few years, and I expected to do the same this year, and had run some numbers through an online calculator several months back, so there was no great surprise there. I'm happy to keep more of my money throughout the year and write a check at tax-time, but I do need to dial it back, because I'm getting close to getting hit with penalties.

Just as I expected, whether or not I was going to itemize was going to be close, but I expected that I would have a small advantage just taking the standard deduction, and that turned out to be true. In past years, I got hit with AMT, and when I was running some numbers a few months ago, I came to the conclusion that this new tax system felt like a first cut of the "flat tax" that had been proposed by Republicans the last few elections. Interestingly, I don't think Trump ever used that term, but that's what it feels like, because AMT is essentially "baked in" and there's no longer an advantage to itemizing deductions for many of us.

The one sad surprise was that I had to write a check to CT as well. In prior years I was getting money back, and I think I made a change to our state withholding last year to get that close to zero. For whatever reason (maybe SALT?), I must have over-compensated, as I had to write a check for a little over $1300.

Overally, my tax rate went down, and I saved a not-insignificant amount of money, which I collected throughout the year.

I'll have to go back and double-check, but I believe that I determined last year that there was one change to the tax system that I didn't hear anyone talk about and which could contribute to the "issue" of people owing more at tax-time. I believe that under the last tax system, bonuses and RSU stock vesting amounts were withheld at a rate higher than my overall tax rate, and now these things appear to be withheld at a rate lower than my overall tax rate. This can result in a larger take-home check on a bonus, but one which was under-withheld.

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Re: How did you feel about your 2018 tax returns?

Post by BanquetBeer » Mon Apr 22, 2019 1:15 pm

Compared to 2018: Income went up 10% taxes went down 15%

Form was way more complicated (added a bunch of pages to fill out 1 line so we can “simplify” the main page)

Not sure how I feel about the savings yet - ask me when the deficit check comes due how I made out in the end.

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Re: How did you feel about your 2018 tax returns?

Post by gd » Mon Apr 22, 2019 1:19 pm

nisiprius wrote:
Mon Apr 22, 2019 12:19 pm
I think the purpose of this whole stupid charade must be to justify blocking ReadyReturn, the California pilot experiment, in which people got their tax forms with all of the information known to the IRS already filled in.
Google taxes on postcard.

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Re: How did you feel about your 2018 tax returns?

Post by John151 » Mon Apr 22, 2019 1:34 pm

This year I used FreeTaxUSA for the second time. It didn’t take any longer than last year, the federal return was free, and the tax cuts shaved fifteen percent off my tax bill. I’m a happy camper.

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Re: How did you feel about your 2018 tax returns?

Post by Presintense » Mon Apr 22, 2019 1:40 pm

$10,000 cap on property tax deduction + a local increase in property taxes = double whammy for us
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Re: How did you feel about your 2018 tax returns?

Post by straws46 » Mon Apr 22, 2019 1:41 pm

I saw someone complained about doing Cal itemization even though they took the federal standard deduction. I should be so lucky. Kansas does not permit itemization unless you itemize on the federal return, and the SALT limit prevented me from itemizing on the federal return. The amount I saved in federal taxes ended up going to Topeka.

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Re: How did you feel about your 2018 tax returns?

Post by jhfenton » Mon Apr 22, 2019 1:44 pm

I used software, so it made little difference. If I had been forced to complete my return on paper, it would have been more confusing. Not needing to track down and document every small charitable contribution saved some time. Our effective tax rate dropped 4%.

The only annoying part this year is that municipality wanted our entire 1040 this year, rather than just the first two pages (because they didn't know in advance what information would be found where). That meant a much thicker packet of information attached to our city return just to write them a two-digit check.

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Re: How did you feel about your 2018 tax returns?

Post by Hug401k » Mon Apr 22, 2019 1:46 pm

Mofritty wrote:
Mon Apr 22, 2019 1:40 pm
$10,000 cap on property tax deduction + a local increase in property taxes = double whammy for us
Same here.

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Re: How did you feel about your 2018 tax returns?

Post by Quirkz » Mon Apr 22, 2019 1:46 pm

It started out with some confusion, but ended well thanks to internet technology.

I always do my own, and have always filed paper. Even when running a couple of small businesses I did okay with it. But this year we had a few too many new factors, on top of the changing forms, and I didn't think I was going to get everything right. I had two different kind of royalties (both tiny, but not so tiny I could ignore them) plus a side job, and my wife had two part-time jobs. After a few hours I knew I was going to mess up a Schedule C, SE, or one of the others, so I turned to FreeTaxUSA to see if having the software would help me get everything straight.

And it did. It gave me just the right nudges where I needed them, especially with the new Qualified Business Income Deduction. I feel like there's always something a bit circular with the self-employment tax, then the half-tax deduction, but this seemed to add a couple of extra circles beyond that, deducting a percentage but then de-deducting a subset of it against the other forms. So, it was a necessary bit of guidance, but should be super easy to repeat in the future.

As for the financial results, I think we did get to keep a little more percentage-wise than in previous years, but it wasn't much of a gain.

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Re: How did you feel about your 2018 tax returns?

Post by nedsaid » Mon Apr 22, 2019 1:49 pm

Creditcardguy wrote:
Mon Apr 22, 2019 11:47 am
As a small business owner, my taxes went down substantially. I was happy, happy, happy. :D
Well, don't think your State and Local Governments didn't notice. As they say, life, liberty, and property are all in jeopardy every time the legislature is in session. Small business taxes might be on their way, a good reason to monitor your local governments.
A fool and his money are good for business.

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Re: How did you feel about your 2018 tax returns?

Post by DaftInvestor » Mon Apr 22, 2019 1:49 pm

It was simpler in the sense that I didn't bother entering a lot of my deductions (Charities usually take some time) as I knew I'd be taking the standard deduction.
I felt good about my return in that I received a higher paycheck through the year and paid less taxes overall (even with the loss of some specific deductions) compared to prior years.
As far as where the information is on each form - doesn't matter to me - I use TurboTax and the experience didn't really change any.
Last edited by DaftInvestor on Mon Apr 22, 2019 2:06 pm, edited 1 time in total.

rkhusky
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Re: How did you feel about your 2018 tax returns?

Post by rkhusky » Mon Apr 22, 2019 1:51 pm

I like the new modular approach, although the schedules will probably need some tweaking.

I like that I don't need to itemize anymore.

I like the doubling of the child tax credit.

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Tamarind
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Re: How did you feel about your 2018 tax returns?

Post by Tamarind » Mon Apr 22, 2019 1:52 pm

Between getting married and higher standard deduction, my taxes dropped a LOT. I think our effective rate was something absurd like 9% of actual gross income even though marginal rate was 22%. I'm tempted to say too low.

The experience of doing them was about the same as usual, except that I couldn't file as early as I usually do because FFF too longer to support all the new forms. I did overwithhold by about $2k despite tuning withholding twice during the year.

atlgenxennial
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Re: How did you feel about your 2018 tax returns?

Post by atlgenxennial » Mon Apr 22, 2019 1:53 pm

Mofritty wrote:
Mon Apr 22, 2019 1:40 pm
$10,000 cap on property tax deduction + a local increase in property taxes = double whammy for us
Same here, the changes were not good for us. About a $10k swing for us...

Presintense
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Re: How did you feel about your 2018 tax returns?

Post by Presintense » Mon Apr 22, 2019 2:01 pm

atlgenxennial wrote:
Mon Apr 22, 2019 1:53 pm
Mofritty wrote:
Mon Apr 22, 2019 1:40 pm
$10,000 cap on property tax deduction + a local increase in property taxes = double whammy for us
Same here, the changes were not good for us. About a $10k swing for us...
Yep. Hopefully others fared better from Tax Reform.
Performance = Potential - Distraction

boglechu
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Re: How did you feel about your 2018 tax returns?

Post by boglechu » Mon Apr 22, 2019 2:04 pm

bloom2708 wrote:
Mon Apr 22, 2019 11:38 am
Your mortgage interest alone was over $24k?

If so, your itemizing is only above the $24k mark. Assuming married/joint.

If you paid $30k in interest, you got a $6k x marginal rate benefit over someone under the baseline standard deduction.

I didn't notice much of a difference. A bit less tax paid for 2018. A bit less tax withheld. No itemizing again with the new larger standard deduction.
Yah, $1 million mortgage in CA. As a physician with solo practice

prd1982
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Re: How did you feel about your 2018 tax returns?

Post by prd1982 » Mon Apr 22, 2019 2:14 pm

I'm give the FORMS a D-:

* Part of my tax prep is to compare this year's form to last year to ensure I have filled in all the fields with approximately the same values. With the 2018 rework, that was more effort. At least should not be a problem going forward (until re-worked again).

* Now I have 4 forms that make up the 1040 of last year.

* Line 4a (IRAs, pensions) is less than the taxable amount. That is just wrong, although what the IRS requested.

* Line 6, total income, is the addition of lines 1-5 PLUS an amount to the left of the line 6 right-most column. While 1040 lines previously contained values other than the right most column (e.g., Social security total amount), this is the first time, i think, that the values were used in calculating taxable income and taxes.

Perhaps the most bothersome is that the redesign of the FORM had nothing to do with making the forms easier to use or implementing policy. I believe the forms were redesigned solely for political reasons. When it comes to taxes, we should be praising / condemning congress and the pres; the IRS should be be tasked with implementing the forms in the best possible way.

GoPackGo
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Re: How did you feel about your 2018 tax returns?

Post by GoPackGo » Mon Apr 22, 2019 2:16 pm

Below are my numbers:
  • 2017 effective federal tax rate: 14.12%
  • 2018 effective federal tax rate: 12.98%
  • If there was no TCJA (2018 income w/ 2017 tax laws) effective federal tax rate: 15.77%
I agree with others, the long length of the 1040 kind of sucks when reviewing what the tax software did.

The amount I owed when doing my taxes was about the same as last year, and the small changes in the amount of federal taxes withheld was barely noticeable (approx $79.65 per paycheck).

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