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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LEE2CEE

Employee

WITH THE NEW 2018 TAX LAWS. I AM LOOSING $400.00. I MAKE LESS THE $30,000. NOW THEY GOVERNMENT IS CHEATING ME OUT OF MORE MONEY TO PAY FOR IMMIGRANT AND THEIR POCKETS

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Seanay

Employee

@NCPERSON1; our Magi is below 160k and still it will not let us take the AOC. Is this because I'm in CA with the SALT cap?? Also TT will not let me take any other dependents credit for my son's...

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NCPERSON1

SALT has nothing to do with AOC.

I would suggest CLOSELY reading the IRS link below on who is eligible and then ensure you have answered all the TT questions correctly as well as input FORM 1098-T correctly.

https://www.irs.gov/credits-deductions/individuals/aotc

for the 'other dependents', again, please read the link below and ensure you have answered all the questions in TT correctly

https://www.irs.gov/credits-deductions/child-tax-credit-and-credit-for-other-dependents-at-a-glance

in this 2nd link there is an 'interactive tax assistant' hyperlink where the IRS will take you through a series of questions to determine which child / other dependent tax credit you are eligible for. the TT questions follow these same questions, but it make help you determine whether you are eligible or not and why not. If after answering the questions at the IRS website determines you should get the credit but TT says you shouldn't, then there is a high probability you've made a mistake in answering the questions in TT

Good luck!

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bzybee08

Employee

I am shocked to discover something similar.. went from owing $800 last year to owing nearly 7k this year. Twitter is exploding with similar stories. Oh, and we claim 0 deductions and I paid extra taxes via payroll last year.

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pdonde2

Employee

I have observed the same thing. I guess it's because the RE taxes and state taxes and such are limited and you must then only use the increased standard deductions, which don't make up for what you have lost in new tax code. I expected to pay not more than last year for the same income but I am paying more.

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Geddy

Employee

Honestly, the bottom line is the total tax, not the refund. I can see it being a bit harder for single taxpayers with modest incomes and those with a lot of dividend income without any witholdings.

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Clark11

Employee

I agree. Now that I am completely retired my wife and I have a lot of small incomes that do not take out a lot of taxes to cover the sum. Most do not take out any state taxes and two incomes do not participate in taking out Virginia income tax.

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pacfun1

Employee

Well, I can't get Turbo tax to give me my self employed health insurance deduction (I am self-employed), so I'm struggling to understand the veracity of the rest of my return.

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NCPERSON1

see this link:

https://turbotax.intuit.com/tax-tips/home-ownership/deducting-health-insurance-premiums-if-youre-self-employed/L6bRhLaVE

note specifically that

"If you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental and qualifying long-term care insurance coverage for yourself, your spouse and your dependents. This health insurance write-off is entered on page 1 of Form 1040, which means you benefit whether or not you itemize your deductions.

follow the step x step instructions for self employed. While all the other business expenses will appear on Schedule C, the self employed medical will be an adjustment on Schedule 1 (line 29).

Is it possible that in fact TT did give you the deduction, but it's now where you expected it???? :-)

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yuukis1

Employee

Just did my 2018 taxes. Made a little more this year than last and deductions were much less so I used the standard deduction this year which was almost the same as the deductions from last year. The amount of tax I paid doubled this year. Fortunately, my with holding covered it but no refund which I have been getting for years. Great tax package. Obviously, I am just not rich enough to get the true benefit from the new tax laws.

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hildee65

Employee

Same experience here. Very little change in income from last year. Married filing joint with no kids and have been claiming married and 0 all year. Went from a $3200 refund last year to owing $2300 this year. Difference I see is loss of business expense deductions and cap on mortgage interest & taxes. All of our income was W2 reported. Had already figured we would probably just breakeven but shocked we actually owe this much additional.

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Imgontaxu

Employee

I'm in the same boat. my gross adjusted is 18000 this year and I owe! I do not understand. Made 5000 less this year and instead of getting back $2000 I owe $77 WTF?

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Korab

Employee

My effective tax rate DOUBLED from last year.

No significant changes to my situation, same pretty much everything, except the tax rate.

I spent the entire day Saturday in shock trying to figure out what I entered wrong. But no, it's not wrong. It's the new "tax cuts".

Did I mention that my tax rate is DOUBLE what it was in 2017?

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anhenry546

Employee

It sounds like you need a CPA to look at your return because the tax brackets did not change, the only change that was made to them was that the standard deductions were higher (in a good way). A single person in 2017 that made over $82,500 would go on to the next tax bracket, 24%. But in 2018 that same person could make up to $84,200 before moving to the higher tax bracket. That's the only change to the rates and it was put in place to HELP people, not hurt them. So from what you are saying that is impossible, your effective tax rate could not have doubled if nothing changed. I have to call BS on that, sounds like someone else who doesn't want the tax cuts to be successful, wonder why lol? The majority of people that are complaining are the people how didn't adjust their withholdings, the irs sent a message to employers to tell them to do so, if your employer didn't tell you that then blame it on them or the irs, not the President.

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Clark11

Employee

I to have had a large increase. From owing Fed's $64 to $1K and state from a refund to $1300. I am completely retired this year drawing SS,IRA,s and a fixed pension plus a p.t. job that stopped during 2018. I have found that little state tax was taken and will correct that but I can not figure why the increased Fed tax when deductions where the same on all income. Are IRA'S taxed differently? That is the change from last years taxes.

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NCPERSON1

best to dissect the impact of the tax law changes from withholdings ......not aware of any changes to IRAs in the tax law change

1) take out the 2017 Form 1040 and divide line 63 (total taxes) by line 37 (adjusted Gross). for 2018, on Form 1040, divide line 15 (total tax) by line 7 (adjusted Gross). Assuming relatively similar income from one year to the next, that percentage difference is the impact of the tax law change

2) take the difference of the resulting percentages and multiply by the 2017 Form 1040 line 37 and THAT is the dollar impact of the tax law change against last year's income. For example, let's say the percent was 10% last year and 11% this year and the Adjusted Gross was $50,000 last year. then the impact of the tax law against last years' gross was $500 ((11%- 10% * $50,000)

3) take the difference between what your refund was last year and subtract what you owe this year and then subtract the result from #3. that is the impact of withholdings. For example, if last year's refund was $300 and you now owe $1,000 then that difference is $1300. then if the result of #3 was $500, then the tax law caused you to pay an extra $500 and changes in the withholding tables drove the other $800 ($1300 - $500)

a lot of math, but it can help understand what is tax law driven and what is withholding driven

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anhenry546

Employee

Someone who finally knows what they are talking about! Maybe that will clear up some of the confusion.

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KoalaBear1

Mine went up enough to have to deal with underpayment penalty issue on both federal and state level which seems to be preventing e-filing my returns so I have to paper file which is an extra hassle on top of the tax increase.

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NCPERSON1

Beethovsn14 ——- if you have penalty on form 2210, hold off filing

There is a known bug that was posted yesterday by the moderator

Search on ‘2210’ to find that post

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HonokaaBoy

Employee

YES. Last year we received more than $6000 in federal and state refunds. This year we owe feds almost $800 and state refund went from $1440 to $280. This with me claiming ZERO deductions at work. Granted, I had a little more 1099 side income this year than last, and my spouse started working and knocked us just into the bottom of the next tax bracket up, but a $6000+ drop is clearly the result of something else (i.e., "tax cuts"). And mortgage interest is meaningless now. Now need to file a new W-4 with my employer asking them to withhold additional tax each paycheck. First time in my life I'd had to do this.

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