Did our taxes today

[kv968]

Our CPA also did a projection for 2018 with the new tax code and, as expected, we will get whacked by Trump's tax increases. We will pay about $6,000 more in 2018 than we did in 2017. Part of that will be due to my income being higher but the rest of it will be do to changes to the tax code.

The 2018 prediction is based on certain assumptions and there are some things I might be able to do to lower the impact of the changes. It will also depend on how much is earned through interest, dividends, and capital gains which is unpredictable. He just ran the forecast based on the 2017 numbers. So that $6,000 figure may or may not be accurate. But I'm sure nothing I do will lower it dramatically.

Steve, just curious...How is your tax bill projected to up so much? I take it it'll come from property taxes? I, as a fellow New Jerseyian, know the pain of high property taxes but you would still be able to deduct at least a portion of those taxes still correct? If not just take the higher standard deduction. I know the higher deduction is more of wash than advertised due to the loss of the personal exemption but it's still marginally higher.

Not that I'm doubting the numbers because I know this bill wasn't a "win" for everyone but that seems like a pretty big jump in taxes for someone who I know doesn't carry a $2 million mortgage

[Like2Plan]

Our CPA also did a projection for 2018 with the new tax code and, as expected, we will get whacked by Trump's tax increases. We will pay about $6,000 more in 2018 than we did in 2017. Part of that will be due to my income being higher but the rest of it will be do to changes to the tax code.

The 2018 prediction is based on certain assumptions and there are some things I might be able to do to lower the impact of the changes. It will also depend on how much is earned through interest, dividends, and capital gains which is unpredictable. He just ran the forecast based on the 2017 numbers. So that $6,000 figure may or may not be accurate. But I'm sure nothing I do will lower it dramatically.

Would you be paying 6k more if everything was the same as 2017 or is the 6k more due to the increase in income (plus the loss of deductions)? Are you getting a significant increase in income? (Have you run the increase through using the 2017 parameters?) Do you have an idea of the net loss of deductions you will have next year?

[disneysteve]

Steve, just curious...How is your tax bill projected to up so much?

Would you be paying 6k more if everything was the same as 2017 or is the 6k more due to the increase in income (plus the loss of deductions)?

I don't know the answers to these questions. I haven't actually reviewed his projection with him. He only gave me the bottom line estimate. I'll wait until after tax season to bother him for the details.

My income will be up about 15K but that certainly doesn't explain a 6K increase in taxes. We will lose deductions due to the changes to the tax code. And we are in a high tax state. I believe when we met he said something about how the loss of the personal exemption would nail us.

I'll post again when I have more details.

[Like2Plan]

We will lose deductions due to the changes to the tax code. And we are in a high tax state. I believe when we met he said something about how the loss of the personal exemption would nail us.

I'll post again when I have more details.

I am not sure that would totally explain such an increase in the magnitude of taxes.
The personal exemption is $4,050 for 2017. I think you have your wife, yourself and your daughter? But, if memory serves--your DD is graduating from college this spring? If so, I believe you would lose the personal exemption for her anyway in 2018 under the old rules (unless she is going on to grad school). https://www.irs.gov/faqs/filing-requ...s-exemptions-2

If I had to guess, I would think the loss of the property tax and state income tax deduction would have more of an impact for folks in NJ. (I believe in 2018 the max deduction for this category will be capped at 10K. )

The standard deduction will be 24k for MFJ in 2018. Do you have significantly higher deductions under 2017 rules that include the property and state income tax deductions?

[disneysteve]

We are expecting my W-2 income to go up but my self-employment income to go down so there are tax implications there. That will also reduce the amount I can contribute to my SEP-IRA. And yes, our daughter is graduating this year. I also had a 14K un-reimbursed business expense in 2017 that I was able to deduct but that was a one-time occurrence so I won't have that deduction to offset taxes in 2018.

So I think it is a number of issues and changes that will result in the higher tax bill for 2018.

[Fishindude77]

Talked to my CPA Friday, looks like we're going to owe around $15K.
I guess it's better to use their money all year, than to let them use mine?

[disneysteve]

Talked to my CPA Friday, looks like we're going to owe around $15K.
I guess it's better to use their money all year, than to let them use mine?

Yep. As long as you hopefully knew that was coming and are prepared to pay the bill, better to owe than be owed.

[frugal saver]

Just finished my taxes yesterday--I always put it off because of Schedule D--but I generally try to get it as close as possible so I'm not paying a bunch and they're not keeping my money without paying me interest.

So my refund this year is $197, which is fine.

I think I'll do much better next year with the tax changes, but the dividends/capital gains always make it hard to predict.

I am looking forward to learning about all the changes for next year, though. Hopefully it will all be ironed out when the continuing education classes start in Aug/Sept.

[bjl584]

Just got my taxes back.

I owe $2600 Federal, $300 State, $28 local.

Ouch.

[frugal saver]

Made a totally stupid mistake on my taxes, so my refund will be on hold.

I always print out the form, do them in pencil, and then type in the information, print out the typed forms and mail them in.

It hit me yesterday that I didn't check the health insurance box and the IRS is refusing any return that doesn't have the box checked (or include the penalty.)

Glad it wasn't a big refund.

[SavingBucks]

Taxes

I entered our info into a tax calculator and we are saving anywhere from $8-15K on the new plan! I am not finished with this year's taxes and will do an analysis then. We did get screwed with the $10K on Schedule A for state income taxes. But we are in "lovely" California as high wage earners but no mortgage interest and very low property taxes (thanks FIL). We were able to get basis from FIL when he passed (we bought the house). Supposedly we will not be subject to as much AMT if any. So they say........... But DH and I have been thinking of moving out of state when we retire to escape some taxes.