Posted on 02/19/2019 10:45:19 AM PST by Oldeconomybuyer
Wait, I owe the IRS?
The first tax filing season under the new federal tax law is proving to be surprising, confusing - and occasionally frightening - for some Americans, especially those accustomed to getting money back from the government.
Take Andy Kraft and Amy Elias of Portland, Oregon. The couple had grown comfortable getting a small refund each year, a few hundred dollars or more. Then they found out they owe $10,160 this year.
"I will never forget the moment, I thought 'We look good' and then we added in the next W-2 and my jaw hit the floor," Kraft said. "There was no way I wanted to believe that what I was looking at was accurate."
President Trump promised a reduction in taxes with the new law. And by most measures, the majority of Americans will see one. The nonpartisan Tax Policy Center projected the tax law would reduce individual income taxes by about $1,260 on average, although it benefits higher earners more. But not everyone is benefiting, including some taxpayers who failed to adjust their withholding.
The IRS has encouraged people to do a "paycheck checkup," saying that "some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks." The trouble is, few Americans seem to have done that.
The majority of workers didn't bother to change their withholding, according to payroll processing firm ADP.
"Not many people took the time or trouble to see if the Tax Cuts and Jobs Act affects them personally," Pete Isberg, ADP's head of government relations, recently told CBS News.
(Excerpt) Read more at cbsnews.com ...
I don’t pay taxes; I get a refund.
Hard to type this with my BS detector blaring away. To go from a small refund to a $10K payable without some sort of notable change (tax bracket, a certain deduction no longer available, etc.) seems odd. The article didn’t specify what happened for this particular couple.
To go from a small annual refund to a small payable would seem more likely (and unfortunate).
Math is hard.
So were the withholding tables changed in the newly passed tax cut law, or were the tables changed by career "Lois Lerner" types at the IRS?
Conspiracy Theorists like myself want to know...
They're either too stupid or too ill-disciplined to save money for themselves during the year. They have to rely on the government to force them to save. And when that doesn't happen, they think they're being swindled.
The witholding tables became MORE ACCURATE.
So instead of having the government steal their money and keep it for a year, earning interest on it, and then returning it, THEY got to KEEP it, and earn interest, or invest it for a greater return, before having a year to pay it to the Feds.
And they're MAD about this?? and how on Earth is this Trump's fault anyway?
Were they changed by the tax cut statute, or were they changed by career IRS employees?
Withholding doesn’t account for that sort of swing.
Something is odd with this story and their return. This Tax wonk is calling “BS” for an incomplete picture.
They must have a lot of income for which they had no withholding. Like a large cap gain or cap gain distributions through mutual funds or 1099 compensation. Something isn’t right and it’s not the tax law that’s at fault. I’d be really surprised.
Shows how many people do not understand their finances.
Yes that is the smartest & ideal scenario. But some people expect to get their usual large refund in order to pay their property taxes or for other use. So now they are coming up short, and are not happy about it. Even though they already got the money, they of course, didn't save it, which is the reason they set up their withholdings in previous years. To have a refund to pay for things.
I kind of thought about the psychology of this. Most people I know get refunds, they’ve come to expect them so I didn’t change any WH and no one asked me to so they will all be getting their refunds this year.
I must be in the minority. My refund when up.
Good question. I'm not sure if it was part of the bill, or coordinated with the IRS, or a rogue agent in Cincinnati.
These article fails to say that the child tax credit was increased from $1000 per child to $2000 per child. That alone helps many families quit a bit.
Andy and Amy in Oregon get neat bike paths, lovely parks, light-rail transportation and huge homeless camps for their Oregon state taxes. If they think they are too high, or don’t want those services, the should vote against them. They just can no longer shirk their duty to pay their full Federal IRS bill.
Andy and Amy in Oregon get neat bike paths, lovely parks, light-rail transportation and huge homeless camps for their Oregon state taxes. If they think they are too high, or don’t want those services, the should vote against them. They just can no longer shirk their duty to pay their full Federal IRS bill.
Portland Oregon. Or years ago, as Lars Larson called it on radio, Moscow on the Willamette (river).
Yep! And thanks to the birth of our fourth child and an increase in the refundable child tax credit, my refund was huge! Thank you Senator Rubio!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.