Just did taxes...annoyed. Other people in the same boat?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes. It happened to us and you can read our example and those from others in other threads. I’m our case we went from a small refund or just about being even to owing $5700. We didn’t realize the extent of the changes and we are far from stupid.

What is your income bracket?

Most of dc are in the upper 5 to 10% income range that all of dcum wants to pay more taxes.

HHI $180k

OMG our HHI is 185k and same, we are paying more. So bitter.

[Anonymous]

the irs withholding tables were totally wrong for many people

i owe 9k, last year got a 4k refund

luckily i had it all saved expecting something like this but will be very unhappy if they actually enforce a penalty

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes. It happened to us and you can read our example and those from others in other threads. I’m our case we went from a small refund or just about being even to owing $5700. We didn’t realize the extent of the changes and we are far from stupid.

What is your income bracket?

Most of dc are in the upper 5 to 10% income range that all of dcum wants to pay more taxes.

HHI $180k

So upper class, the range that should be be paying more in taxes.

[Anonymous]

The withholding tables are so bad that I had my entire salary withheld (i.e. zero pay check) for November and December to make sure we cleared the penalty threshold. Turns out IRS waived it last week. Still owe 9K.

To be fair bonus payment are the main culprit but the tables are supposed to take those into account.

Also, extremely grateful to have this problem (i.e. a top 5% problem) and overall we paid $20K less than we would have paid under the old tax code.

[Anonymous]

Anonymous wrote:I vote for IRS incompetence. There were news stories at the time that stated that the IRS withholding based on the new tax law was way off. Based on those stories we increased our withholdings and we don’t Owen

Because the withholding tables are still based on exemptions, but there are no exemptions anymore, instead we have a higher standard deduction. It doesn’t really correlate.

After I waited to see what happened to the first paycheck after the new law went into effect, I ran the irs withholding calculator and the Turbo Tax one. Wildly different answers. So then I went and pulled the actual tables and did my own calculations and came up with something more in the middle. (Would have wildly overwithheld under the turbo tax method and underwithheld with the IRS calculator.) I was within $500, which is fairly typical for us.

[Anonymous]

If this tax refund issue is as pervasive as this thread suggests it could put the US economy in a recession as people often pre-spend this money in anticipation.

My guess is that this is only a Top 5% problem...90% of the population is fine.

[Anonymous]

Np here - I don't recall my paycheck changing at all last year with respect to my take home. How exactly did the change in the withholding tables look to the average person? Did your take home change? I really am at a loss.

[Anonymous]

Anonymous wrote:Np here - I don't recall my paycheck changing at all last year with respect to my take home. How exactly did the change in the withholding tables look to the average person? Did your take home change? I really am at a loss.

Most paychecks should have gone up when the tax tables were updated as tax rates in all income brackets went down. The amount would have varied given your specific tax situation. A very small number might have seen higher witholdings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes. It happened to us and you can read our example and those from others in other threads. I’m our case we went from a small refund or just about being even to owing $5700. We didn’t realize the extent of the changes and we are far from stupid.

What is your income bracket?

Most of dc are in the upper 5 to 10% income range that all of dcum wants to pay more taxes.

HHI $180k

So upper class, the range that should be be paying more in taxes.

That’s not as “upper class” in NoVA as it is many other places. I don’t know that I’d say it is upper class for my area.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm personally suprised by the people who say they are owing even with 0 withholdings. Did you all change to 0 half-way through the year? Are you sure you were actually at 0?

it's the withholding tables that were the problem that payroll based deduction off of. clearly you do not understand how taxes work. Additionally if you have 2 earners and they is a vast discrepancy in earnings, then the tax tables for withholding will be different, but at filing will cause you to owe.

The ignorance on this board sometimes makes me want to smash my head on my computer and then weep for our nation.

Well that's kind of my point - why would the withholding tables be so far off? Previously they were biased in favor of overwithholding. My understanding that the current tweak was aimed to get them closer to 0 liability -- not people owing $1000s, like they are stating here. I'm wondering how the IRS got it so wrong, since I doubt their intent was that people would owe $1000s with 0 exemptions.

The withholding tables are not off. Do you understand how income tax brackets work? The withholding tables having no idea how much your spouse makes and there is no way for your employer to know how much your spouse makes. So the withholding tables calculate your withholding based on you having a single income and that your income goes from $0-$X. However, if your spouse make $Y dollars, then your income is from $Y to $Y+X (from your income to your combined income). Likewise, your spouse's withholding is calculated based on being from $0-Y instead of from $X to $X+Y. So assume that you each earn $100K. Then your withholdings are set as if your total income was $100K and you are taxed from 0-100K. Same for your spouse. But in reality, one of you is actually earning from $100K-200K so would be in a higher tax bracket. But the withholding table has no way of knowing what that $X value would be to add to your income for withholding. So, it is up to you as an individual to gauge how much additional money to set aside depending on how much your spouse earns. The higher your spouse's income, the more you should set aside each pay period to account for the higher net income of the household.

If you want an idea, here are the adjusted income tax brackets for 2018:



So if you each made $100K, then one of you would be paying 10%, 12% and 22% of your income. But the other partner is paying 22%, and 24% on their income.

If you each made $200K, then one of you is paying 10%, 12%, 22% and 24%. The other partner is paying 24% and 32% taxes on their income.

But, as I said, the withholding tables have no idea how much your spouse makes, so there is no way to withhold based on an unknown additive number. So it's up to you to figure out ballpark how much you'll owe and adjust your withholding to account for your spouse's income.

[Anonymous]

This thread and complaints on twitter, are pretty universal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes. It happened to us and you can read our example and those from others in other threads. I’m our case we went from a small refund or just about being even to owing $5700. We didn’t realize the extent of the changes and we are far from stupid.

What is your income bracket?

Most of dc are in the upper 5 to 10% income range that all of dcum wants to pay more taxes.

HHI $180k

So upper class, the range that should be be paying more in taxes.

That’s not as “upper class” in NoVA as it is many other places. I don’t know that I’d say it is upper class for my area.

You are making 2 to 3x what middle class families make.

Yes, you are upper class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm personally suprised by the people who say they are owing even with 0 withholdings. Did you all change to 0 half-way through the year? Are you sure you were actually at 0?

it's the withholding tables that were the problem that payroll based deduction off of. clearly you do not understand how taxes work. Additionally if you have 2 earners and they is a vast discrepancy in earnings, then the tax tables for withholding will be different, but at filing will cause you to owe.

The ignorance on this board sometimes makes me want to smash my head on my computer and then weep for our nation.

Well that's kind of my point - why would the withholding tables be so far off? Previously they were biased in favor of overwithholding. My understanding that the current tweak was aimed to get them closer to 0 liability -- not people owing $1000s, like they are stating here. I'm wondering how the IRS got it so wrong, since I doubt their intent was that people would owe $1000s with 0 exemptions.

The withholding tables are not off. Do you understand how income tax brackets work? The withholding tables having no idea how much your spouse makes and there is no way for your employer to know how much your spouse makes. So the withholding tables calculate your withholding based on you having a single income and that your income goes from $0-$X. However, if your spouse make $Y dollars, then your income is from $Y to $Y+X (from your income to your combined income). Likewise, your spouse's withholding is calculated based on being from $0-Y instead of from $X to $X+Y. So assume that you each earn $100K. Then your withholdings are set as if your total income was $100K and you are taxed from 0-100K. Same for your spouse. But in reality, one of you is actually earning from $100K-200K so would be in a higher tax bracket. But the withholding table has no way of knowing what that $X value would be to add to your income for withholding. So, it is up to you as an individual to gauge how much additional money to set aside depending on how much your spouse earns. The higher your spouse's income, the more you should set aside each pay period to account for the higher net income of the household.

If you want an idea, here are the adjusted income tax brackets for 2018:



So if you each made $100K, then one of you would be paying 10%, 12% and 22% of your income. But the other partner is paying 22%, and 24% on their income.

If you each made $200K, then one of you is paying 10%, 12%, 22% and 24%. The other partner is paying 24% and 32% taxes on their income.

But, as I said, the withholding tables have no idea how much your spouse makes, so there is no way to withhold based on an unknown additive number. So it's up to you to figure out ballpark how much you'll owe and adjust your withholding to account for your spouse's income.

It has always been the case that dual income households need to review the withholding tables and adjust accordingly. The issue this year is that, with no changes to to their W4s, an unprecedented number of taxpayers went from being overwithheld to being underwithheld. That's an issue with the withholding tables.

The fact that the IRS is temporarily lowering the safe harbor threshold to waive the underpayment penalty for some taxpayers and is, for the first time, allowing employees to adjust their W4s up until May 2019 if they find, upon filing taxes, that they underwithheld suggests they themselves agree that the 2018 tables have issues.

It's also worth noting that even for those who were so inclined--I usually run our taxes mid-year since I am self-employed so that we can adjust the last two estimates--there was no way to see the draft tax forms until the fall, so even if you did do this and discovered at that point that you had underwithheld significantly, there wasn't much time to correct it. We bumped up our last two estimates and threw additional money into the final couple of months of payroll withholding for DH so we will only owe a few hundred (with a total tax liability that's about the same as last year since the SALT changes wiped out any gain from the tax cuts for us), but many people are just finding out now.

[Anonymous]

"
This forum was all for the rich paying more tax, free healthcare, free college. Until they had to pay them "

What a buffoon. People are salty because their taxes may be higher and no one is getting any of that. They're just supporting tax cuts for the pet projects and tax cuts the ultra-rich.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes. It happened to us and you can read our example and those from others in other threads. I’m our case we went from a small refund or just about being even to owing $5700. We didn’t realize the extent of the changes and we are far from stupid.

What is your income bracket?

Most of dc are in the upper 5 to 10% income range that all of dcum wants to pay more taxes.

HHI $180k

So upper class, the range that should be be paying more in taxes.

That’s not as “upper class” in NoVA as it is many other places. I don’t know that I’d say it is upper class for my area.

You are making 2 to 3x what middle class families make.

Yes, you are upper class.

I didn’t disagree with that. I understand. Too bad there isn’t some type of cost of living adjustment.