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Topic   IncomeTaxTZ

Demonis
Double Gold Good Trader
5-Feb-2018(#1)
So I'm trying to figure out the new tax plan for the 2018 tax year and how I need to plan for it. That being said, I've never been especially educated on the tax process. I understand it well enough to know that tax refunds are bad (interest free loans to the government), but now I'm looking into how the new Standard Deduction rate will affect me.

Let me toss out some figures here and see if I'm understanding it correctly.

Under the old plan:

Income $52,000 Married Filing Jointly.
$52,000 - $12,700 = $39,300 Taxable Income
15% of $39,300 = $5,895 Tax Responsibility.

New Plan:
$52,000 - $24,000 = $28,000 Taxable Income
12% of $28,000 = $3,360 Tax Responsibility.

Is this accurate? Am I missing something? This seems too good to be true and makes me suspect I'm not including everything. I know there are other deductions and such, but is this not the basic breakdown before any other deductions or credits?

Admiral
Bronze Good Trader Gold Global Trader (7) Has Written 1 Review
5-Feb-2018(#2)
I'm going to go out on a limb and say that I'm almost certainly no more educated on it than you are...but here is my question:

What is the "-$12,700" and "-$24,000" in those plans?
DefaultGen
GameTZ Gold Subscriber Quadruple Gold Good Trader Gold Global Trader (7) Has Written 5 Reviews
5-Feb-2018(#3)
Admiral wrote:
> I'm going to go out on a limb and say that I'm almost certainly no more educated
> on it than you are...but here is my question:
>
> What is the "-$12,700" and "-$24,000" in those plans?

The standard deduction. Where have you been on this whole new tax law

Osiris
300 Trade Quintuple Gold Good Trader
* 5-Feb-2018(#4)
are personal exemptions out now, or still in? Dependents, other than child tax credit?

Your numbers as stated seem sound, just not sure if we've lost other exemptions from
income in trade for the higher standard deduction. You didn't itemize previously?

New marginal rates are set now?
Demonis
Double Gold Good Trader
5-Feb-2018(#5)
I believe MOST personal exemptions are out.

I was planning on itemizing this year, but there's no way I'll clear the $24,000 standard, not even close.

Searching online for mathematical breakdowns of how these tax values work is near impossible, or I'm not using the right search terms.
Osiris
300 Trade Quintuple Gold Good Trader
5-Feb-2018(#6)
so your previous year number would have also have exemptions from income not available now, the windfall would not be as sweet as written, cause you would have had 12700 plus personal exempts. No kiddies I take it.

most middle class folks with homes probably itemized 15 to 20K, depending if their health insurance share was paid pretax or not. So now we got 10K max for State and local taxes?
Lotta folks be doing the 24K.
Admiral
Bronze Good Trader Gold Global Trader (7) Has Written 1 Review
5-Feb-2018(#7)
DefaultGen wrote:
> Admiral wrote:
>> I'm going to go out on a limb and say that I'm almost certainly no more educated
>> on it than you are...but here is my question:
>>
>> What is the "-$12,700" and "-$24,000" in those plans?
>
> The standard deduction. Where have you been on this whole new tax law
>
>

Ah, filed jointly. Right. Why would I care about joint standard deductions?
tonymack21
GameTZ Gold Subscriber 450 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally Has Written 3 Reviews Secret Santa
* 5-Feb-2018(#8)
24000 is a nice deduction though, I gotta get married again. damn lol

mine was pretty high and my refund is nice with head of house and 2 kids on it though. my brother is always so angry about how without a family you dont make out in this, and I have to remind him of all the other expenses he doesn't have the other 99% of the year lol


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Demonis
Double Gold Good Trader
5-Feb-2018(#9)
Yeah people without kids or property don't understand that a few grand refund is like a drop in the bucket.
tonymack21
GameTZ Gold Subscriber 450 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally Has Written 3 Reviews Secret Santa
* 5-Feb-2018(#10)
Demonis wrote:
> Yeah people without kids or property don't understand that a few grand refund is
> like a drop in the bucket.

it'll pay a few bills and replace the appliance that inevitably dies on you as soon as you think you are about to get frivolous with a few hundo lol :p

im gonna pay off as many of my small debts that are incurring interest as possible so I can recoup that each month.

Demonis
Double Gold Good Trader
5-Feb-2018(#11)
I always try to work my W4 out so that I end up paying in as little as possible without needing to pay at the end of the year. No interest free loans from me! :)
tonymack21
GameTZ Gold Subscriber 450 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally Has Written 3 Reviews Secret Santa
5-Feb-2018(#12)
me too, I try to give them as little interest free as possible. before I had the kids on there id usually come out getting a few hundred or having to pay a few hundred

Admiral
Bronze Good Trader Gold Global Trader (7) Has Written 1 Review
5-Feb-2018(#13)
I "get" the whole no interest free loans thing...but why do people care so much?

If everyone invested this extra money for themselves, that would be one thing. But overall, I don't see getting money back at tax time a BAD thing really...even if it's the govt holding it for you.
tonymack21
GameTZ Gold Subscriber 450 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally Has Written 3 Reviews Secret Santa
5-Feb-2018(#14)
That's kinda true too. It is kind of nice to get a lump sum for things that you need such things for. I do try and minimize it somewhat so I'm getting as much as I can along the way though

MikeyWhoa
GameTZ Subscriber Double Gold Good Trader This user is on the site NOW (4 minutes ago)
5-Feb-2018(#15)
Admiral wrote:
> I "get" the whole no interest free loans thing...but why do people care so much?
>
> If everyone invested this extra money for themselves, that would be one thing. But
> overall, I don't see getting money back at tax time a BAD thing really...even if
> it's the govt holding it for you.


Take the savings from each check and put it back. Invest. Make bank instead of letting it sit for a year. Bonus!

Plus, as Americans, most of us hate giving the government anything, even if we get it back.
SirConnery
GameTZ Gold Subscriber 1000 Trade Quintuple Gold Good Trader This user is on the site NOW (27 seconds ago) Secret Santa
5-Feb-2018(#16)
I'm single and self employed LLC. I have enough deductions that my cpa will likely carry this over to the next year or I get a beefy refund.
Demonis
Double Gold Good Trader
6-Feb-2018(#17)
Admiral wrote:
> I "get" the whole no interest free loans thing...but why do people care so much?
>
> If everyone invested this extra money for themselves, that would be one thing. But
> overall, I don't see getting money back at tax time a BAD thing really...even if
> it's the govt holding it for you.

For me it's just about keeping what's mine. If you went to a restaurant and someone in a suit came over and took a large piece of your steak and promised to return it in a year you'd probably not be happy about that.
Dustin
GameTZ Subscriber 650 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally This user is on the site NOW (9 minutes ago)
6-Feb-2018(#18)
Demonis wrote:
> Admiral wrote:
>> I "get" the whole no interest free loans thing...but why do people care so much?
>>
>> If everyone invested this extra money for themselves, that would be one thing.
> But
>> overall, I don't see getting money back at tax time a BAD thing really...even
> if
>> it's the govt holding it for you.
>
> For me it's just about keeping what's mine. If you went to a restaurant and someone
> in a suit came over and took a large piece of your steak and promised to return it
> in a year you'd probably not be happy about that.

Your point is good, but that analogy is terrible.
Demonis
Double Gold Good Trader
6-Feb-2018(#19)
Dustin wrote:
> Demonis wrote:
>> Admiral wrote:
> |>> I "get" the whole no interest free loans thing...but why do people care so much?
> |>>
> |>> If everyone invested this extra money for themselves, that would be one thing.
>> But
> |>> overall, I don't see getting money back at tax time a BAD thing really...even
>> if
> |>> it's the govt holding it for you.
>>
>> For me it's just about keeping what's mine. If you went to a restaurant and someone
>> in a suit came over and took a large piece of your steak and promised to return
> it
>> in a year you'd probably not be happy about that.
>
> Your point is good, but that analogy is terrible.

Well sure, steak would rot and has no way of increasing in value. It's the basic idea.
Dustin
GameTZ Subscriber 650 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally This user is on the site NOW (9 minutes ago)
6-Feb-2018(#20)
smile
John
GameTZ Gold Subscriber GameTZ Full Moderator 400 Trade Quintuple Gold Good Trader Gold Global Trader (13) Secret Santa
6-Feb-2018(#21)
Admiral wrote:
> I "get" the whole no interest free loans thing...but why do people care so much?
>
> If everyone invested this extra money for themselves, that would be one thing. But
> overall, I don't see getting money back at tax time a BAD thing really...even if
> it's the govt holding it for you.

^ This. The reality is that, for many Americans, this forced payment is the ONLY real savings that they do all year.

Most of them do NOT put that extra per-paycheck during hte year into an investment. So, it doesn't do them any good and they are, in fact, probably WORSE off by not giving that "interest-free loan" to the government for the year and then getting it back as a refund.

It's a sad situation, but it really is probably "for the best." Now they just need to take the refund and dump it into a Roth IRA or something -- instead of going "Sweet! Got my refund! Time to blow it on a new 4K TV with HDR because the one I spent my refund on last year was only 4K, but without HDR!" wink
tonymack21
GameTZ Gold Subscriber 450 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally Has Written 3 Reviews Secret Santa
6-Feb-2018(#22)
but HDR is really great!

Demonis
Double Gold Good Trader
6-Feb-2018(#23)
John wrote:
> Admiral wrote:
>> I "get" the whole no interest free loans thing...but why do people care so much?
>>
>> If everyone invested this extra money for themselves, that would be one thing.
> But
>> overall, I don't see getting money back at tax time a BAD thing really...even
> if
>> it's the govt holding it for you.
>
> ^ This. The reality is that, for many Americans, this forced payment is the ONLY
> real savings that they do all year.
>
> Most of them do NOT put that extra per-paycheck during hte year into an investment.
> So, it doesn't do them any good and they are, in fact, probably WORSE off by not
> giving that "interest-free loan" to the government for the year and then getting
> it back as a refund.
>
> It's a sad situation, but it really is probably "for the best." Now they just need
> to take the refund and dump it into a Roth IRA or something -- instead of going "Sweet!
> Got my refund! Time to blow it on a new 4K TV with HDR because the one I spent
> my refund on last year was only 4K, but without HDR!" wink

Yeah I used to be really bad about blowing the Refund. Seems like one year it was NEW PC, then NEW TV, then NEW GPU, then NEW CONSOLE!

I put maybe half of the extra i get in each check into savings for the rainy day fund. If it ever hits $10,000 where I want it to be, then I'll go back to enjoying it.
SirConnery
GameTZ Gold Subscriber 1000 Trade Quintuple Gold Good Trader This user is on the site NOW (27 seconds ago) Secret Santa
6-Feb-2018(#24)
My friends wife got huge refunds, essentially their own overpaid money.

She told me it was their three kids, the house, the dog, the marriage. She said that each of those things was a family expense. They never got audited either, but I think my friends mother was sorting it out at tax time and never actually correcting her.
SirConnery
GameTZ Gold Subscriber 1000 Trade Quintuple Gold Good Trader This user is on the site NOW (27 seconds ago) Secret Santa
6-Feb-2018(#25)
I do refunds right: they carry over to the next year and cover my first few expected amount quarterly tax payments.
Osiris
300 Trade Quintuple Gold Good Trader
6-Feb-2018(#26)
buying new consumer goods with refunds is patriotic ya know!

i do agree with John that the invisible no interest deposit with the feds is better than just pissing away extra net pay.
tonymack21
GameTZ Gold Subscriber 450 Trade Quintuple Gold Good Trader Global Trader - willing to trade internationally Has Written 3 Reviews Secret Santa
6-Feb-2018(#27)
There is some point to that. The lump sum is gonna pay off a couple things and buy me a computer monitor lol

Topic   IncomeTaxTZ