Tax musings?

[quesyrah]

Mar 12, 2022 0:26:01 GMT -5 sadlebred said:

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

According to this we should have gotten ours March 7. It’s marked accepted but still processing

[aprilsails]

Canadian Tax Musings

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I’m waiting on daycare receipts to finish our taxes.

I’ve got everything in TurboTax and it is showing I will be receiving an $8k refund (with the current estimated daycare amount). I worked a huge amount of overtime last year which means many of my paycheques were taxed high, and I also backfilled my RRSPs and was able to drive my salary down a tax bracket at the provincial and federal level.

My intention is to take the money and dump it straight into my TFSA which has contribution room. Obviously this was forced savings in a manner of speaking, but it feels very good to have that chunk of retirement savings taken care of for the year.

[pierogigirl]

I was expecting a bigger refund because we did not get the advance child tax credit, even though we qualified. Instead, it was about the same as usual, and maybe a little less. I am seeing my financial advisor this week to increase the amount I put into my 403B to reduce our tax liability and at least keep more of our own money. Dh will need to do the same. We need SALT to be repealed, too.

[midwestmama]

Ughhhhh...DH did our taxes and it looks like we owe $4700 (Fed). We got around $1700 in advance child tax credit, so the net owed is about $3000. DH is going to increase his withholdings and maybe increase his 401k contribution. This is the second year in a row that we've owed around $5000, so we might need to actually talk with a tax professional.

ETA:  Looks like we'll get around $500 back from the state and $1000 back from city taxes, so at least that will help offset the Fed amount we have to pay.

[plutosmoon]

Plugged my info into tax act today, I'll either get a refund of around $750 from the feds, or owe $750 depending on my ex. It's his year to claim DD, but he has not asked for the 8332 yet, so I'll wait to hit submit until around april 12th. I know last year he went to HR Block, I assume they would ask him for the 8332. If it's accepted with DD as a dependent, he probably didn't claim her. If it rejects, I'll just take her off and resubmit, I may add some money to my IRA get my agi low enough to qualify for the saver credit. Ex lived and worked in a different state, so I plan to claim DD on my state tax regardless of the fed outcome. I'm getting about $400 back from the state.

[ssmjlm]

MM reminder, you file a return, you get a refund

So Vanguard still hasn't sent our 1099, looks like March 15. I didn't hit the button to file yet.

Also, I don't think my Vanguard is doing what I want it to. I really can't figure out the website. If they recommend my spread to be X, why does everything keep going into some short term reserve? So confused and no time to deal with it. Really need to email my parents FA to get connected.

[jinkies]

We are going to owe so much money. I missed paying my last quarterlies and they were already going to be underpaid bc I've made 2x what I did last year. Combine that with the advance child tax credit we received, and I'm really dreading getting our bill.

I dropped everything off with our accountant last week. I'm in no hurry to get the final results.

[ellipses84]

It was a major scramble this year but my business taxes are filed so now I can start working on our personal taxes (and I’m going to schedule my quarterly payments). I’m actually still owed a refund from last year and got an interest statement for it from the IRS. I came across a Q&A from someone in a similar situation on a tax guidance website and it basically said it’s going to take forever for that refund to come through.

[simpsongal]

My mom was supposed to work w/someone from H&R Block - they traded calls, discussed her taxes etc. The lady found out she had a rental property and just ghosted her - refused to do her taxes. WTF?

[notsopicky]

H's income varies widely year to year, and it's annoying. Add in capital gains, and ugh. Last year we owed mid 4-figures. This year, it was 3X that. That auto-deduction hurt when I saw it.

[jlt19]

I know a lot of us bought new/re-financed this year. Did that change anyone's decision to itemize? Or maybe for next year? We bought in August, so interest wasn't outrageous this year, but for 2022 it'll be a lot (loan was $340k at 2.625%, so not an insane amount). But add in $5k property taxes, a good few thousand in health care costs OOP, and I'm sure other things I'm forgetting and we may be over the threshold.

For those who use a CPA, about how much do you pay?
We paid $5k in taxes this year, which I anticipated b/c of my low withholdings and got hit with a lot of capital gains, but it may be worth it to start having a professional do this for us.

[agnes]

Mar 20, 2022 8:04:35 GMT -5 jlt19 said:

I know a lot of us bought new/re-financed this year. Did that change anyone's decision to itemize? Or maybe for next year? We bought in August, so interest wasn't outrageous this year, but for 2022 it'll be a lot (loan was $340k at 2.625%, so not an insane amount). But add in $5k property taxes, a good few thousand in health care costs OOP, and I'm sure other things I'm forgetting and we may be over the threshold.

For those who use a CPA, about how much do you pay?
We paid $5k in taxes this year, which I anticipated b/c of my low withholdings and got hit with a lot of capital gains, but it may be worth it to start having a professional do this for us.

We refinanced in 2020 and still didn’t meet the threshold for itemizing.  When we had the business we paid our accountant $300. Since we didn’t have anything complicated this year I just used turbo tax. And I feel like it’s gotten even easier to use since the last time I used in like 2016 or something. 

[sadlebred]

I pay $400 to a CPA for combined personal and hobby business. She saves me at least that much a year and is worth it. I'm organized and had everything to her clearly labeled and sorted.

[Susie]

We're checking in at owing the IRS $1,861.  Considering we sold our 2008-purchased house in 2021, and as a result are repaying the last $2,000 of that repayable 2008 first time homebuyer "credit" on our 2021 1040, that means for 2021 we were effectively only off by $139.  Damn, go us!

[purplepenguin7]

Mar 26, 2022 15:34:25 GMT -5 Susie said:

We're checking in at owing the IRS $1,861.  Considering we sold our 2008-purchased house in 2021, and as a result are repaying the last $2,000 of that repayable 2008 first time homebuyer "credit" on our 2021 1040, that means for 2021 we were effectively only off by $139.  Damn, go us!

Shiiiiit I forgot about this. We took the same credit in 2008 and i didn’t even think about having to pay back the balance (we have a cpa do our taxes). We were already going to owe a bunch from some stock we sold so now we are really going to be in trouble.

Edit: I panicked too quickly. Our house sold in 2022 so we are safe for one more year. Next year should be better for us tax wise. I guess
I should thank my buyers for screwing us over in dec 2021! Thanks for the reminder about this though, I thought it was a 10 year loan so I thought it was finished. Oops.

[Susie]

Mar 26, 2022 16:22:26 GMT -5 purplepenguin7 said:

Mar 26, 2022 15:34:25 GMT -5 Susie said:

We're checking in at owing the IRS $1,861.  Considering we sold our 2008-purchased house in 2021, and as a result are repaying the last $2,000 of that repayable 2008 first time homebuyer "credit" on our 2021 1040, that means for 2021 we were effectively only off by $139.  Damn, go us!

Shiiiiit I forgot about this. We took the same credit in 2008 and i didn’t even think about having to pay back the balance (we have a cpa do our taxes). We were already going to owe a bunch from some stock we sold so now we are really going to be in trouble.

Edit: I panicked too quickly. Our house sold in 2022 so we are safe for one more year. Next year should be better for us tax wise. I guess
I should thank my buyers for screwing us over in dec 2021! Thanks for the reminder about this though, I thought it was a 10 year loan so I thought it was finished. Oops.

I think it was a $7500 credit repayable over 15 years, right?  Whew on having a year to plan for it!

[savan]

We finally filed last week. As expected the SALT cap continues to get us. We had $26k in local and property taxes. The 10k cap put our itemized deductions at $21k which meant taking the standard deduction again. Having that additional $16k in deductions would make a huge difference. *sigh*

[purplepenguin7]

Mar 26, 2022 17:00:05 GMT -5 Susie said:

Mar 26, 2022 16:22:26 GMT -5 purplepenguin7 said:

Shiiiiit I forgot about this. We took the same credit in 2008 and i didn’t even think about having to pay back the balance (we have a cpa do our taxes). We were already going to owe a bunch from some stock we sold so now we are really going to be in trouble.

Edit: I panicked too quickly. Our house sold in 2022 so we are safe for one more year. Next year should be better for us tax wise. I guess
I should thank my buyers for screwing us over in dec 2021! Thanks for the reminder about this though, I thought it was a 10 year loan so I thought it was finished. Oops.

I think it was a $7500 credit repayable over 15 years, right?  Whew on having a year to plan for it!

Yes you were right! I googled after my initial post. I mistakenly thought it was 10 years, not 15. I definitely need to start paying more attention to my return after my accountant does it.

[jwright]

Mar 20, 2022 8:04:35 GMT -5 jlt19 said:

I know a lot of us bought new/re-financed this year. Did that change anyone's decision to itemize? Or maybe for next year? We bought in August, so interest wasn't outrageous this year, but for 2022 it'll be a lot (loan was $340k at 2.625%, so not an insane amount). But add in $5k property taxes, a good few thousand in health care costs OOP, and I'm sure other things I'm forgetting and we may be over the threshold.

For those who use a CPA, about how much do you pay?
We paid $5k in taxes this year, which I anticipated b/c of my low withholdings and got hit with a lot of capital gains, but it may be worth it to start having a professional do this for us.

340k x 2.625%= 8925* and taxes are limited to 10,000. Since the standard deduction for married couples is over $25k, you’d need to find $6-$7k more in charitable, investment interest or other deductions to itemize (if you hit the max on SALT taxes). Healthcare costs likely won’t help because they have to be over a 10% of your income floor (unless you are self employed?)

Buying a house isn’t the large change tax-wise that it was pre-2017 unfortunately. I don’t know that a CPA could help much, with W-2 income strategy is limited.


*Thats not an exact amortization number but relatively close.

[jinkies]

We heard from our accountant, and she's still trying to find a few more deductions for us, but we are going to owe $10-12,000. I knew it would be bad, but was not expecting 5 figures. I feel a little sick.

I knew I was underpaying my quarterlies, and I did know that because of that, we should have opted out of the monthly child tax credit payments, but I was overwhelmed at the time and never figured out how to opt out. Without that, the number still would have been bad but at least kept to 4 figures. Yikes.

I guess on the bright side, I'll pay more accurate quarterlies this year, so this won't happen again. But holy cow.

I do wonder how many people accepted and spent the monthly payments and are now scrambling to have to repay them. I was (mostly) aware of how it worked, but I'm sure a lot of people did not fully understand the distinction between the stimulus checks and the tax credit checks.

[kadams767]

Does anyone have a good calculator that runs the cost/benefit analysis of paying off a mortgage vs. continuing to pay and taking the mortgage interest deduction?

[flygirl]

Mar 30, 2022 11:38:27 GMT -5 kadams767 said:

Does anyone have a good calculator that runs the cost/benefit analysis of paying off a mortgage vs. continuing to pay and taking the mortgage interest deduction?

I don’t have a calculator but if you have 10k in state and local taxes besides your mortgage, you’re not really getting the benefit of deducting mortgage interest anymore.  We pay $6500 just in property taxes so adding in our state taxes puts us well over the threshold.  If they actually raised it to $20k for married couples (which would be fair!) then that would different!

[kadams767]

Mar 30, 2022 12:11:54 GMT -5 flygirl said:

Mar 30, 2022 11:38:27 GMT -5 kadams767 said:

Does anyone have a good calculator that runs the cost/benefit analysis of paying off a mortgage vs. continuing to pay and taking the mortgage interest deduction?

I don’t have a calculator but if you have 10k in state and local taxes besides your mortgage, you’re not really getting the benefit of deducting mortgage interest anymore.  We pay $6500 just in property taxes so adding in our state taxes puts us well over the threshold.  If they actually raised it to $20k for married couples (which would be fair!) then that would different!

Mortgage interest is not part of the $10,000 SALT limitation, which is why I am trying to decide what to do going forward.    

[flygirl]

kadams767, you’re right…I was thinking that it limits me under the standard deduction because of SALT

[gt7301b]

My husband is still trying to get a copy of his W2. He submitted the form to HR to get a duplicate form several weeks ago and it was supposed to take 5 days to get it. Of course he still hasn't called anyone about it.

[fryjack2]

jinkies, I'll sit on that bench with you. We owe 5 figures. We need to actually take our CPA's advice this year and pay quarterly because even though we withhold a ton, we still always have to pay.

If I get an expected yearly raise, it won't be that much but will bump us into the next tax bracket and the additional tax amount will increase by 3x what my raise will be ( if my raise is 10k for instance, our taxes will go up by 30k). No real point of the raise I know its not a bad problem to have, just stinks when writing the check.

[statgirl]

We owed again this year (four figures) but I am going to throw some into the HSA for last year and that gets us below $1K. I knew we should have opted-out of the child tax credit distributions but figured that we might owe a bit more than last year and it would be okay. It was not okay—we owed the advance portion back.

So…for 2022 my plan is (1) don’t take any advance portion of the child tax credit if offered, (2) see if HR is better at changing withholding than they have been in the past, and (3) up either the HSA or my 401K since I am the lower earner in the family and I should try to max something. I predict I’ll do 1 and not the others in a timely fashion.

[ohgillian]

I’m here to complain about the withholding tables. We don’t have much income outside of wages ( like a few thousand at most) and to get it anywhere near right I have to claim single and zero AND have several hundred extra withheld monthly. Also thank goodness I opted out of the child tax payments or we’d owe around $1500 federal.

Meanwhile I’m happy to re-up this Pro Publica article from 2019 about the American tax industry

www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free

[simpsongal]

Apr 3, 2022 6:40:15 GMT -5 ohgillian said:

I’m here to complain about the withholding tables. We don’t have much income outside of wages ( like a few thousand at most) and to get it anywhere near right I have to claim single and zero AND have several hundred extra withheld monthly. Also thank goodness I opted out of the child tax payments or we’d owe around $1500 federal.

Meanwhile I’m happy to re-up this Pro Publica article from 2019 about the American tax industry

www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free

wow awesome reporting but depressing. Tax prep has gotten too expensive. I hate the stupid reassuring interface. I wonder if the increasing number of people filing the std deduction will be the next push against the industry. You can’t maximize deductions if there aren’t any. But I guess free wasn’t really free, and consumer revolt hasn’t helped there.

Dh and I tried to file on paper years ago to avoid tax prep fees. We quickly abandoned that plan. We’re both lawyers and he’s a tax lawyer and a cpa.

[mainelyfoolish]

Apr 2, 2022 21:03:02 GMT -5 fryjack2 said:

jinkies , I'll sit on that bench with you. We owe 5 figures. We need to actually take our CPA's advice this year and pay quarterly because even though we withhold a ton, we still always have to pay.

If I get an expected yearly raise, it won't be that much but will bump us into the next tax bracket and the additional tax amount will increase by 3x what my raise will be ( if my raise is 10k for instance, our taxes will go up by 30k). No real point of the raise I know its not a bad problem to have, just stinks when writing the check.

Marginal tax rates don’t work like that. If the raise puts you $10k over the next bracket threshold, you only pay the highest rate on that $10k. 

If the raise makes your total income high enough that you are no longer able to take advantage of other deductions or credits and that makes your taxes increase by more than the raise amount, that does stink.