Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

Eugene

(61,593 posts)
Tue Feb 19, 2019, 08:33 AM Feb 2019

I owe how much? Americans shocked by impact of new tax law

Source: Associated Press

I owe how much? Americans shocked by impact of new tax law

By SARAH SKIDMORE SELL
February 19, 2019

Wait, I owe the IRS?

The first tax filing season under the new federal tax law is proving to be surprising, confusing — and occasionally frightening — for some Americans, especially those accustomed to getting money back from the government.

Take Andy Kraft and Amy Elias of Portland, Oregon. The couple had grown comfortable getting a small refund each year, a few hundred dollars or more. Then they found out they owe $10,160 this year.

“I will never forget the moment, I thought ‘We look good’ and then we added in the next W-2 and my jaw hit the floor,” Kraft said. “There was no way I wanted to believe that what I was looking at was accurate.”

-snip-

Some people already saw the benefit in the form of bigger paychecks. That’s because the law forced employers to change what they withheld. But the system is far from perfect, and many workers didn’t have enough in taxes set aside. Now, the IRS wants that money.

In addition, the law also eliminated personal exemptions, increased child credits, limited popular deductions and generally upended many familiar practices that determine what happens at tax time. That has taxpayers feeling a bit unmoored.

-snip-


Read more: https://apnews.com/57ac6498374944f7bfb20660630c95f4

6 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
I owe how much? Americans shocked by impact of new tax law (Original Post) Eugene Feb 2019 OP
Hey America. How's drumpf's tax cut to the wealthiest democratisphere Feb 2019 #1
We've all been trickled on Yo_Mama_Been_Loggin Feb 2019 #3
"Some people already saw the benefit in the form of bigger paychecks." JayhawkSD Feb 2019 #2
I am retired and get no paychecks! at140 Feb 2019 #4
You confirm the essence of my comment. JayhawkSD Feb 2019 #5
Agree 100%...to dislike someone does NOT need bending the truth.. at140 Feb 2019 #6
 

JayhawkSD

(3,163 posts)
2. "Some people already saw the benefit in the form of bigger paychecks."
Tue Feb 19, 2019, 11:41 AM
Feb 2019

And in those bigger paychecks lies the hypocrisy of this whole hysteria over the "smaller refund" media firestorm. It is because the consumer had less money withheld from his paycheck, and therefor more money to spend, during the year that he had less refunded. So that smaller refund was probably not because he paid higher taxes. AP uses an example of a person who, instead of a refund, will owe some $10,000, but that is far outside the norm. The average refund this year over last year dropped by just 20% and a miniscule number went from refund to owing money.

AP says that "the law also eliminated personal exemptions," but doesn't say that it doubled the standard deduction which has been used historically by more than 95% of taxpayers. It says that it "increased child credits," but doesn't point out that that reduced taxes, not increased them.

AP says that the law "limited popular deductions," but doesn't point out that fewer than 10% of taxpayers itemized their taxes in the past and that with the larger standard deduction even fewer will this year, meaning that the limitation on these deductions is meaningless for all but a few taxpayers in the highest income brackets.

I'm not defending Trump. I'm a Democrat and I hate Trump. But I prefer logic, and I don't favor the attitude of "a lie becomes the truth if it destroys Trump."

at140

(6,110 posts)
4. I am retired and get no paychecks!
Thu Feb 21, 2019, 11:02 AM
Feb 2019

My income is mainly social security and a few dividends from mutual funds.
I am required to take money out of IRA every year because of age over 70.5
and that money is fully taxable income! It is not money coming in from outside,
it is simply a transfer from my IRS account to my checking account.

Point is I had nothing withheld from my paychecks, since I get no paychecks.
I just did my tax calculation and my tax is slightly lower this year compared to last year.

 

JayhawkSD

(3,163 posts)
5. You confirm the essence of my comment.
Thu Feb 21, 2019, 11:31 AM
Feb 2019
"I just did my tax calculation and my tax is slightly lower this year compared to last year."

The hysteria about smaller refunds is invariably worded to imply that people are paying higher taxes. I have been pointing out that a smaller refund is not necessarily higher tax, but is more often than not a smaller tax with an even smaller withholding.

Thank you for confirming that your tax was, in fact, lowered by the "Trump tax cut."

Again, to head off the flamers, I am not a Trump supporter. I despise the man and everything that he stands for. I do, however prefer truth over dishonest hyperbole.

at140

(6,110 posts)
6. Agree 100%...to dislike someone does NOT need bending the truth..
Thu Feb 21, 2019, 07:57 PM
Feb 2019

There are more than enough facts resulting from Trump actions to see that the middle class is getting screwed and their assets are shifting to the top 1% richest. The tax cut for the top 1% was bigger by orders of magnitude than the middle class.

But there is no way to deny that MOST taxpayers in the middle class brackets got a small tax cut.
My both kids earning middle class wages received a tax cut. Truth is our best weapon.

Latest Discussions»Issue Forums»Economy»I owe how much? Americans...