How much are you losing in taxes this year?
There’s more bad news for taxpayers. A government report has revealed that 11 million taxpayers are losing out on $323 billion worth of deductions due to a punishing change in President Donald Trump’s tax law.
The hard news comes after early filers were stunned by shrinking — to vanishing — tax refunds.
The deduction wallop detailed in the government report centers on capped deductions for state and local taxes — including real estate taxes. Formerly all local taxes could be deducted for federal taxes; now it’s capped at $10,000, which particularly hurts homeowners in major metropolitan areas — especially in the Northeast and California — where housing tends to be more expensive.
The cap was imposed to help pay for huge tax cuts to corporations, whose taxes were slashed by 40 percent, from 35 percent to 21 percent.
The deduction hit is so staggering that it could end up swamping modest gains taxpayers had expected to enjoy due to tax cuts.
The figures were revealed in an audit conducted by the Treasury Inspector General for Tax Administration that examined Treasury Secretary Steven Mnuchin’s efforts to block local governments’ attempts to stop the federal government from taking an extra bite out of community residents.
Several states ― including New York and New Jersey ― are challenging the deduction cap in court, claiming the new tax law is unconstitutional because of federal overreach and the harm to some states and their residents.
Tax refunds were also down significantly — 17 percent — for the first three weeks of the filing season this year (ending Feb. 15) over the same time last year. But by the end of the fourth week refunds ticked up a total of 1.3 percent over the same period last year.
Taxpayers’ ultimate status and how they’ll fair in different demographics won’t be completely known until an analysis after the end of tax season.
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Feel free to reply to any comment by clicking the "Reply" button.Removing the medical deduction was one of the most heartless changes in a country where most bankruptcies are due to medical bills.
misstuffy
Level 7
Mar 10, 2019
0
It's what happens when you elect rich criminals office
THis sort of crap will only create a boon in the underground economy as more and more people seek work off the books and who can blame them when we are all struggling to survive while those who don't need the tax cuts reap the most benefit from them.
misstuffy
Level 7
Mar 10, 2019
0
This is hilarious. Tax refunds are typically lower this year. Do you know what else was lower, the amount of money taken out each paycheck. So if you got an extra 30 each paycheck, it stands to reason you'd get 1600 less in your return. So this tax deal put more money in your pocket each week. It might not have been much and you probably didn't notice, I know, that's the administrations fault not yours. So let's blame the government because why not. I got considerably less back this year. But I actually did my research and compared paychecks from year to year (why, because I'm not lazy and I just don't bash people when they're not cool). , year over year, I got taxed less each period.
bohica1369
Level 5
Mar 3, 2019
2
hilarious? and people are lazy? so you actually took the time to compare the post tax dollars from all paychecks last year back to when the laws changed and the year prior (or i guess an equal time period because i don't think the law kicked in on january 1) showed how much more money you pocketed (adjusted for any raises or bonuses i assume) and then compared it to the (i assume) smaller refund compared to the prior year (equal time periods, adjusted for any raises, and adjusted for time frame because the law kicked in not on january 1) and calculated the amount of money that you gained? i also assume you are filing single, or the other party you file with would need to do same.
i have to admit, i am lazy. i might just do this sometime. well, not really lazy. i haven't gotten my returns back from the accountant. and being now divorced i don't have access to my ex's current financials. and there was a job change in there which further complicates it.
i do have a question for you, how much more did you make? and please if you have an easy methodology for above share.
That is smoke and mirrors, most folks are smart enough to figure that in when they also figure out they are actually paying more overall.
I hope people don't hate me for saying this, but know that I voted for Hillary and have protested against the tax bill numerous times with local Indivisible groups (haven't heard of Indivisible? Google to find your local chapter).
I ran my family's 2018 income and expenses through the 20 tax program and found that my household tax went down this year by $25,600.
Not only were the tax brackets and the Alternative Minimum Tax made more favorable for upper income people, I am now able to take 20% off my business's income. Not only do I not have to pay federal income tax on that 20%, it also escapes self employment tax.
But I didn't need a tax cut. I was doing just fine. I am living proof that the biggest beneficiaries of the tax cut were the people who needed it the least.
The tax "cut" cost my retired parents $162. They usually itemize a large amount of medical expenses (ages 85 & 80). This year they could not itemize those expenses (standard deduction was raised, but personal exemptions were eliminated) and it cost them.
dfross
Level 5
Mar 2, 2019
2
I'm sure the corporations and top 1% did just fine.
Stephanie99
Level 8
Mar 2, 2019
3
My taxes are paid out of my salary. Its usually fairly accurate but a little known fact in UK is you don't have to pay taxes like that. You can pay all at once. I could never have all the money at once. I owe what I owe and frankly I think we Brits should pay more. Taxes are a good thing.
Amisja
Level 8
Mar 2, 2019
3
@ToolGuy My understanding of socialism is not the same as yours. When I lived in USA, most people suggested Socialism equalled communism which it certainly does not. My great-grandparents were communists. I believe in public ownership for most public services, education, healthcare, prisons, defence, housing and infra-structure. I believe in fair and effective taxes. If you benefit from said public services, you contribute to them. The more you benefit, the more you contribute. I do not believe in state religion, monarchy or an upper house based on inheritance. I do not believe that nuclear weapons should be held as a deterrent against global war on this little land. I believe that decent jobs should be paid decent incomes and that people in work should not have to rely on benefits to support a basic standard of living. I believe the disabled should not be punished because they exist, same goes for the elderly. I believe we are missing an opportunity to deliver extensive green energy, especially considering the windiest place on earth sits in the North Sea. I believe that 1% of the population holding all the wealth is absolutely abhorrent. There is no reason for such greed. I believe that people who do not contribute should be encouraged to do so, but I accept that a small number (Alan Greenspan suggested 6% for a nation to remain healthy), will not. This is the burden of a meritocracy. I believe in fair and open immigration, I believe that as our native birth rate diminishes then we will need our fellow globe citizens to help us. I believe in being a member of the EU and everything that means for myself and my children. I believe that every single human being has the right to a free and open adult relationship with the person of their choice, I believe they have the right to express their sexuality and their gender in whatever way gives them the most joy. I believe that children should be protected and absolutely placed at the centre of all we do. I believe in rehabilitating criminals and helping them understand the affects of their crimes. I believe in second chances. I do not believe in prisons for non-violent offenders. I personally do not indulge in any illicit substances, but I believe that the harm caused by some drugs would be eradicated if society managed their supply rather than people who want nothing other than to make money. I believe that personal happiness has now and never has been linked to lots of money. I have none and I am perfectly happy. I totally understand the pull of the market and its forces, I understand that one year people can make millions on toys that twiddle round and they be worthless the year after. I am not fundamentally opposed to people making money. However no person lives in isolation, We all benefit from the countries we were born into and we should contribute to those countries, especially us in the west. Oh and though its not a problem in UK, the reason I live in UK and not the country of my children's birth is I wanted them to come home in one piece from school. Your enemies are NOT your neighbours, your enemies are the RICH! That is a socialist!
Very interesting post.
Our federal & state income tax changes were neutral. Simply requiring different manipulation of deductions allowed.
bigpawbullets
Level 9
Mar 2, 2019
2
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