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Your Federal tax liability is what you pay in Federal taxes, not what your refund is

Discussion in 'General Discussions' started by SW48, Feb 12, 2019.

  1. SW48

    SW48 Administrator Staff Member Supporting Member

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    Your Federal tax liability is what you pay in Federal taxes, not what your refund is. The people that don't understand money, think that their refund tells them whether they got a tax cut or a tax increase.

    This article explains that you cannot compare the taxes owed based on your refund amount. You have to see if your withholdings from your paycheck went down. An accountant explains that 2/3rds will see a tax cut, 1/10th depending where you live could see a tax increase, and the rest will not get a tax cut or tax increase as expected.

    https://finance.yahoo.com/news/trum...-201206749.html?.tsrc=daily_mail&uh_test=1_05
     
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  2. Phat Mama

    Phat Mama Council Member

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    We had warnings!!!

    https://finance.yahoo.com/news/get-ready-for-an-unhappy-tax-surprise-141252733.html

    For many workers, income taxes are on autopilot. Your employer withholds a fixed amount from each paycheck, and when you file your return the following year, it generally works out. About 75% of filers get a refund each year, and it’s usually around the same amount, as long as you don’t change jobs or undergo other big changes.

    But big changes hit most taxpayers in 2018, because President Trump signed the Tax Cuts and Jobs Act into law at the end of 2017.
    The TCJA lowered the overall tax burden for about two-thirds of workers, leaving a majority with slightly larger paychecks.

    **** Nobody noticed this???^^^^

    But a quirk could leave some taxpayers with an unhappy surprise as they file their 2018 returns this year, and find that the refund they were expecting is smaller than before. Some people accustomed to a refund could even end up owing money, instead.


    The IRS updated its withholding calculator last year, to account for changes in the tax law. But few taxpayers seem to have used the tool or updated their withholdings to account for the changes.

    https://www.irs.gov/individuals/irs-withholding-calculator
     
  3. 4/15

    4/15 Mayor

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    And if you have to pay more this year than last it means you got screwed.
     

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