Employee

Question

Very Large increase in 2018 Taxes

Forum|Forum|7 years ago
January 28, 2019
22 replies
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Is anyone else noticed a huge increase in their taxes for 2018? I have been getting substantial tax refunds for the last 30 plus years, consistently. Last year was no exception. So in 2018 I increased my 401K contributions by 10% and I got a 2% pay increase as well with no change in filing status. One would think I would have done better this year and got at least an equal tax refund to last year's. But behold I started working my 2018 taxes in Turbo tax this week and I see a 20K increase in my taxable income. This change is the most monstrous change I have ever seen. Is this a result of the new tax laws? This increase has resulted in me actually have to pay taxes this year. So I went from getting a 3K plus refund last year to this. So again I ask again, is anyone else seeing this much change or is Turbo Tax just wrong?

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NCPERSON1

did you review the two year co pare to assess what is driving the changes? Suggest beginning there

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DtaxPayerAuthor

Employee

The biggest change I see is an increase of 20K in my taxable income because 1. I no longer qualify to itemize and 2. I cannot itemize because they did away with personal exemptions so I fall just short of the Standard deduction of 24k when filing as married filing joint.

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anhenry546

Employee

I know they did away with the itemized deductions but in turn they also made the standard deductions much higher. That's odd that it doesn't offset it. It sounds like your taxes are far more complicated than mine. I do mine and my husbands but his is just a simple w2 with his yearly salary, it's pretty easy thank goodness. I did have a few set backs this year. Last year we qualified for the exemption for my husband not having health insurance but because he makes more money this year we didn't qualify I guess and had to pay $700 for the penalty. I'm so glad that's one thing they have changed that helps just about everyone.

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zuiwall

Employee

Depending on your circumstances the tax changes may have affected your refund. As suggested, do compare your prior year return to this years. Exemptions are the biggest area that individuals will feel the change. Truck drivers working for a single company will also notice a difference.

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JimT71

I did a preliminary pass on my 2018 taxes this weekend using TurboTax and found the exact same thing. My taxes went up by approx. 300%! Very little has changed with my income the past 2 years. Last year I got a COLA raise and that's about it, so certainly my taxes should not have jumped so considerably. Nor did I change my withholding. It appears that with the tax "cuts" that were enacted last year, since I did not change my withholding, those cuts were not cuts at all but LOANS using fuzzy math! Very disappointing and I will be voting accordingly.

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zuiwall

Employee

How many people did you claim last year?

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JimT71

Last year I claimed 3 (3 people in household), same as I have every other year going back as far as I can remember.... the only thing that changed from 2017 to 2018 for me is a 2.7% raise and these goofy tax law changes!!

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jmengel12005

Employee

Yes, i'm seeing the same thing. I own a house and I am married we both take 1 deduction (claiming ourselves) . We both received raises this year but nothing major. We both contributed a signification amount to our 401K and/or 403B. We went from receiving a $3K plus refund last year to owing just under $3K this year. This tax reform is actually screwing me and I'm sure the rest of the middle class. Should I go back to claiming zero and go back to claiming single instead of married? This is just crazy to me. I thought this tax reform was supposed to help the middle class not hurt us. I won't be filing my tax return until the April 15th deadline because now I have to come up with uncle sam's money.

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NCPERSON1

two alternatives to playing with the exemptions on your paycheck:

1) leave the exemptions / married as is and request additional withholdings of $3000 / the number of paycheck in a year (it's on the W-4 form)

2) use the coupons in turbo tax to send Uncle Sam a check for $750 on each of the 4 due dates over the course of the next year.

out of curiosity, are you in CA or the Northeast where the 'SALT' (state and local taxes) limit of $10,000 were expected to have the biggest impact?

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jmengel12005

Employee

Thanks for the guidance!

I'm in Virginia where are taxes are high but not that high. Otherwise, my bill would most certainly be a lot worse.

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gamagesa

Employee

Unfortunately, it really depends on your situation. For me, the two biggest changes are the elimination of the exemptions and the capping of State/Local/Property taxes on the itemized deductions. If you always had itemized deductions above $24k, then the elimination of the exemptions is huge. If your itemized and standard were close in the past - hovering around 12k, then the elimination of the exemptions wouldn't be that bad because your new standard deduction makes up for the loss in exemptions.

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collegegrl1783

Employee

I am in the same boat, usually get $3k back, now owe $10. It was driving me crazy for hours! It showed a reduction of about $15k in federal deductions when you click on why do I owe. But it shows 2017-2018 as being relatively the same at review. Reviewed everything, and upon relooking at mortgage interest paid, a window pops up saying that the law giving you credit for mortgage interest paid is UNDER REVIEW. And that it may affect your return! Lets hope so, I think that is the difference being seen, we are not actually getting that deduction for mortgage interest yet. Saved and will review later...fingers crossed that's the problem

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Vin11_2

Employee

I got the same message for Tuition and Fees. THIS SUCKS! We owe more than I have ever owed and nothing that I entered as credits or deductions reduced the amount owed... Mortgage or Tuition, zero credit...

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rosenbaum

Employee

yes it's because you cannot deduct yourself anymore.

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Seanay

Employee

I have same thing happening right now and im floored. Last year $2k refund and this year so far a $4k owed. I am not able to take American opportunity credit for two boys and don't think I'm not sure I'm getting mortgage interest either compared to last year, I'm at loss as to how I can even begin to reconcile this as I did not prepare for outcome, doesn't look like there is anything else I can do to help

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taxgirl

Employee

This is due to the withholding tables and W-4's not being adjusted for tax reform. Most people this year will find out they were under withheld if they did not update their withholding throughout the year. This should be fixed for 2019.

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stephronl

Employee

There have been many articles saying this could happen to millions of people this year some people didn't review and change there with holdings we also lost some tax breaks

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Seanay

Employee

So in the end I lost alot of credits and deductions I was getting from itemized deductions previous years to the tune of about 7k... education credits, mortgage interest (live in CA), and withholding not changed seems to be the biggest factors

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zuiwall

Employee

You can claim all the deductions you had last year, however, if it is not over 12,000, 18,000 or 24,000 this depends on your filing status, then these deductions wouldn't help you. Their are 2 areas where people are getting slammed. One is if you didn't have enough taxes withheld from your paycheck's, review your withholding and adjust them for this year. The second is if you were claiming a lot of exemptions. Since exemptions were suspendid for 2018 you could be above your taxable income from 2017.