Tax musings?

[simpsongal]

Anyone else have any observations or things to share re their tax filings? I'm upping my withholding. Sigh...

I figure we would owe....but quite a bit more than I thought. We were lazy and didn't opt out of the advanced child tax credit. That's one reason. Plus with all the refi's we ended up paying about $4500 less in deductible interest. Good I guess....but ouch re the tax bill.

Really wish they'd lift the SALT cap too. We had $10K in property taxes alone, state and local were another $15K

[wildrice]

I don't really understand taxes well enough to give good commentary, but we owe around $2500 in federal this year, for the first time ever. We owed more like $1200 last year and only made 12k more this year than last, so I'm not entirely sure why that added up so much. I think we must have hit new tax bracket. We didn't change anything with withholdings.

We still take the standard deduction, which I suppose works out better for us but is kind of a bummer as relatively new homeowners, because we've actually owed MORE than usual in the 2 years since we bought a house! But our HHI has changed a lot in the last 3 years too so IDK what is normal yet. Prior to last year we always got a refund but we also had never broken 100k in income before that point.

I am guessing we should increase our withholdings to at least collect another $200 a month from us, but I don't wanna. Grr.

[flygirl]

I normally check to make sure we’re on target mid year but last year I didn’t. We got a very small amount back last year and we opted out of the child tax credit so I figured we would break even. Nope-we owe $2000. The SALT tax at least needs to be adjusted for married couples who both work. If I’m single I get the $10k max, yet if I’m married I still only get $10K…fix it please!

[purplepenguin7]

I haven't filed yet (scared of how much I'll owe) but I had a tax funny. I filed an ammended 2018 return in early 2020, it took forever to be processed and paid due to covid so I received some interest on the refund. Now I got a form to claim the the interest paid on my 2021 return. I had to laugh at the irony.

[ssmjlm]

I haven't started because they said to wait until end of February with all the child tax credit stuff. So I'll probably start it next weekend and see where we are. I think I upped my withholdings last year knowing we would both have an increase in salary.

[midwestmama]

We haven't started ours yet, hoping to tonight. I upped my Fed withholding by $150/pay for most of 2021 because we owed $5k in 2020. (The major change that year was that I changed companies, and somehow I wasn't having enough deducted for Fed taxes (although it's possible our income went into a new tax bracket). I had even increased my 401k contributions when I changed companies, so my taxable earnings in 2020 should have been close to my 2019 taxable earnings.)

Not holding my breath for a Fed return, but hoping we at least don't owe much.

[ny96]

We haven’t started yet, but we owed last year and will certainly owe again this year. The thing I’m wondering about is the increased Child and Dependent Care limit. Did anyone see a big impact from that? We will hit the $8000 limit for kid 2 and probably spent around 5k on summer day camp for the other.

[dcn]

We are getting a refund, but it is smaller than I thought. Mostly due to the child tax credit. We had some capital gains this year too, as our advisor moved some investments around.

We bought a house but 6 months of interest doesn’t make a difference, we still took the standard deductions. Aaaaaand we are moving in June so are going to sell the house, soooooo nothing for this year either.

[ellipses84]

I planned to do taxes this weekend and it didn’t happen. I need to find the time!

[savan]

I haven’t filed yet but I’m always here to complain about the SALT cap. The first year it was instituted our tax liability increased by $5000! That’s a huge difference. Our property taxes have continued to go up since then as well. I would love to be able to itemize again.

[just]

We're getting about 3k back which I wasn't expecting. It seems that based on our 2020 income we weren't eligible for the full amount of the 3rd stimulus and so got a step-down amount. However in 2021, we both maxed out our retirement which decreased our AGI and made us eligible for the full amount, and that's the bulk of the refund. We donated our other stimulus payments, and will probably do the same for this too (though I'm tempted to throw it in our kitchen fund)

Plug for people to consider switching from TurboTax. It removed it's free-filing option for low-income earners, and is predatory for the consumer and the tax industry as a whole. There's lots of 'less evil' options out there - I love me some FreeTaxUSA for the scammy name. I liked Credit Karma because of the free state option in previous years but they have their own issues, and were acquired by CashApp this year. 

[lessel]

Feb 28, 2022 14:27:08 GMT -5 savan said:

I haven’t filed yet but I’m always here to complain about the SALT cap. The first year it was instituted our tax liability increased by $5000! That’s a huge difference. Our property taxes have continued to go up since then as well. I would love to be able to itemize again.

Dude, I opened this thread to be salty about the SALT cap too.

UGHHHHHH is all I've got. 

Is it going away? Someone please tell me someone is lobbying someone about this.

[simpsongal]

Feb 28, 2022 15:10:33 GMT -5 lessel said:

Feb 28, 2022 14:27:08 GMT -5 savan said:

I haven’t filed yet but I’m always here to complain about the SALT cap. The first year it was instituted our tax liability increased by $5000! That’s a huge difference. Our property taxes have continued to go up since then as well. I would love to be able to itemize again.

Dude, I opened this thread to be salty about the SALT cap too.

UGHHHHHH is all I've got. 

Is it going away? Someone please tell me someone is lobbying someone about this.

I think there was some talk about lifting it in the Build Back Better Act (raising it from $10K to $80K), that later fell apart.

I gotta imagine talk of lifting the cap will increase as more people get hammered by it this tax year and next. It's not indexed to inflation, which I gather was probably the idea for the legislators who passed it.

I was feeling extra salty about the marriage penalty this year. After I input my W2 we were getting back $5-6K, put in DH's and then we owed $8K (it didn't end up that bad once we itemized, but ughhhhh).

[ellipses84]

Tax bracket ranges for 2022, adjusted for inflation:

taxfoundation.org/2022-tax-brackets/

[mainelyfoolish]

I went back to work this past summer after being a SAHM for 14 years. I only work 24 hours a week and my hourly rate is relatively low (and much lower than DH’s), so when I calculated out the extra I would need to have withheld from my paychecks to keep our typical tax refund about the same, my take home pay takes a significant hit. However, I was pleased to find that I calculated my extra withholding correctly and our refund this year is on par with how it has worked out in prior years. We got the advance child tax credit payments last year, and our refund this year is just a little higher than the amount of the remaining child tax credit we are due. (I like to keep my refund close to the amount of the child tax credit so when our kids age out of the credit, I won’t feel a change in our take-home pay. Plus the refund makes for a nice “bonus” to put in the 529 accounts.)

One funny tax thing that happened to me last year was when I took two days of unpaid leave (I couldn’t use vacation days for six months), I had a paycheck with only 8 hours of time on it (I get paid weekly). I hadn’t considered that my fixed amount of extra withholding would still apply. I laughed when I saw my paystub, the total pay for one day of work with all my additional withholding was very, very small!

[Mushe]

I feel like I’m in tax purgatory…I always like to run turbo tax early, but I signed up for extra daycare FSA when they raised the limit, because H’s employer didn’t raise their limit. Due to a really annoying error by personnel, it wasn’t processed until January, when I submitted the form in APRIL. They’ll have to issue me an amended W-2 and I’ll owe that money back to my employer (that part is fine). I guess I could just run the numbers as is, knowing it’ll only get better/less taxable income.

[atarianna]

simpsongal the SALT cap expires in 2025, as does the increased standard deduction. All the other shitty changes that negatively impacted normal people will stay and everyone will be so so fucked.

[sadlebred]

I love my CPA. I hand her everything (neatly organized, labeled, in a folder, etc), and let her team do their magic. It's worth every cent to outsource. I don't come near the SALT limit, so that's not a factor. I am not a high income earner and don't have a large house. I got a bit more back this year than I did last year, which is good. It will go towards the damage the busted pipe did to the den. I don't plan to adjust my deductions or extra money that I pay every paycheck.

[hazelden]

We're closing on the sale of our rental home and will get a check for 200k next week. I did some double checking and I'm almost sure that we can avoid capital gains taxes by maxing out our 401k and HSA contributions for the year. That should save us 30k in taxes! We barely make over six figures, so all of this is very exciting for me.

[ellipses84]

[mention]hazelden [/mention] If not, I believe you can invest it in real estate funds. IDK details but I know my parents did this when they sold some rental properties they’d inherited and managed for a few years. Maybe through a QOZ fund? They are close to retirement, though, so it may make more sense for them. It’s worth talking to a FP and/ or accountant about your options.

[ssmjlm]

So glad we haven't even started. Last week DH got a letter from the IRS about the stimulus. I'm scheduled to get one today per my USPS email.

I hope people that filed early and got these still had the right numbers. Otherwise, ugh doing an amendment and then waiting when the IRS is already so behind.

[gt7301b]

I'm annoyed at my husband. He never received his W2 and of course we had to fax a form to get it e-mailed to him again. That should take us another 5 days to get. I pretty much have everything together, but I am traveling for work next week which makes me nervous about getting our tax guy everything before his deadline. At least we should get that final form soon.

[gretchenindisguise]

Mar 10, 2022 9:19:30 GMT -5 ssmjlm said:

So glad we haven't even started. Last week DH got a letter from the IRS about the stimulus. I'm scheduled to get one today per my USPS email.

I hope people that filed early and got these still had the right numbers. Otherwise, ugh doing an amendment and then waiting when the IRS is already so behind.

This is why I've been waiting. I had a warning pop up looking for that specific letter for IRS and neither of us have received it yet. I created an IRS account to get the number, but didn't do that for H. I hope ours come soon!

[hbomdiggity]

We met with our accountant this week. Not a good day. Getting hammered by salt cap and I ended up getting a weird distribution from my company stock program that didn’t have taxes withheld. There were also new state taxes that were not included in state withholding and have to be paid separately to state to the tune of $4k.

[just]

Mar 10, 2022 9:19:30 GMT -5 ssmjlm said:

So glad we haven't even started. Last week DH got a letter from the IRS about the stimulus. I'm scheduled to get one today per my USPS email.

I hope people that filed early and got these still had the right numbers. Otherwise, ugh doing an amendment and then waiting when the IRS is already so behind.

IRS is autocorrecting most stimulus mistakes. If you fill in that you didn't get it, and you did, they're just removing it from your refund and depositing.

Obviously better to get it right, but it seems that most people who get it wrong won't need to file an amendment.

[Pilsy]

We finished ours relatively early for the first time in 7 years, only to find out something was done incorrectly with my MIL's estate return last year, and we have to file an amendment now. I don't care so much about the money - if we owe it, we owe it; but it's a pain to me when I think something is officially off my to-do list, and then it returns. And it's not even like I can just bang out the change; we're waiting on an accountant to issue some kind of form, which he couldn't prepare until an insurance company gave HIM some kind of form just this week. So much for being early-ish!

We're getting a small refund, but only because we paid quarterly taxes, which reminds me to increase my withholdings.

[sadlebred]

My taxes are done, back, and spent on new LVP flooring after a pipe burst.

[quesyrah]

We don’t normally get much back- maybe $1,500-$1,800.

This year we are getting over $6K. Our return has been accepted but not processed. I am paranoid that we did something wrong, but we used turbo tax like always. That just seems like a lot of money.

[Saudade]

I'm getting a huge chunk due to divorce and being in school. However, I submitted 3 weeks ago and still haven't received my refund. I hate waiting. It keeps me worrying that I did something wrong.

[sadlebred]

Estimated dates of when you'll get your return:

clark.com/personal-finance-credit/taxes/tax-refund-schedule-dates/?utm_source=Clark.com&utm_campaign=afd33dfbe8-Clark_Daily_Newsletter&utm_medium=email&utm_term=0_afa92deb83-afd33dfbe8-71256673