Average tax refunds are down 8.4%

[Gertdoggy]

I am still not seeing the logic presented here. You paid less taxes throughout the year which is why you are receiving a smaller refund. This isn't sleight of hand or black magic it is common sense. If your only way to save money is through a tax refund then just have more taken out of your paycheck every pay period. I would suggest you have that put into some sort of interest bearing account rather then the 0% the Gov will give you through a tax refund. I can not see how anyone can make this into a negative - the bottom line is you paid out less money in taxes this year compared to last year.

[spartan max2]

Obviously I'm younger so I do not have a ton of things I have to pay for, (like a house, kids, and stuff). It sucks to get less then you were expecting.

But what has been shocking me is how much people use the tax return as a instrumental part of their budget. 

I have always just used it as a bonus each year and do not calculate it into my budget at all. 

[Gromdor]

21 minutes ago, Gertdoggy said:

I am still not seeing the logic presented here. You paid less taxes throughout the year which is why you are receiving a smaller refund. This isn't sleight of hand or black magic it is common sense. If your only way to save money is through a tax refund then just have more taken out of your paycheck every pay period. I would suggest you have that put into some sort of interest bearing account rather then the 0% the Gov will give you through a tax refund. I can not see how anyone can make this into a negative - the bottom line is you paid out less money in taxes this year compared to last year.

Simple.  There is a substantial group of people who have increased tax liability because they relied heavily on itemization and lost those deductions: https://www.fidelity.com/viewpoints/personal-finance/how-has-tax-reform-changed-deductions

They will receive less tax returns and in some cases have to pay in.

While it is true that people received a bit more on their checks, it doesn't account for the full 8.4% difference in the average refund amount. 

[Farmer77]

nvm

Edited February 12, 2019 by Farmer77

[spartan max2]

5 minutes ago, Gromdor said:

Simple.  There is a substantial group of people who have increased tax liability because they relied heavily on itemization and lost those deductions: https://www.fidelity.com/viewpoints/personal-finance/how-has-tax-reform-changed-deductions

They will receive less tax returns and in some cases have to pay in.

While it is true that people received a bit more on their checks, it doesn't account for the full 8.4% difference in the average refund amount. 

I think it depends on who you are.

My employment last year was in one of the lowest tax brackets, made 33k, so my bracket lowered its income tax by 3%

And the standard deduction increased helped me because I have almost none thing to itemize. 

I actually got more on my returns then usual. 

(probably why I'm not upset like everyone else)

Edited February 12, 2019 by spartan max2

[Gromdor]

34 minutes ago, spartan max2 said:

I think it depends on who you are.

My employment last year was in one of the lowest tax brackets, made 33k, so my bracket lowered its income tax by 3%

And the standard deduction increased helped me because I have almost none thing to itemize. 

I actually got more on my returns then usual. 

(probably why I'm not upset like everyone else)

Yeah, that's why I keep stressing that it is the people who itemize that pay more from this tax cut.  The 1040EZ people should all get a higher return.

[Tatetopa]

1 hour ago, Gertdoggy said:

I am still not seeing the logic presented here.

Logic?  Catch up with the times here Gertdoggy.  We don't live in an age of logic.  We live in an age of appearances, distortion, and choose your own truth.  Populations are directed and spurred into action by emotion, not logic.

[+DieChecker]

Smaller Tax Refunds Surprise Those Expecting More Relief

Quote

The average refund among early filers was down 8.4 percent, according to the Internal Revenue Service. The smaller checks, in some cases, stem from the loss of certain deductions. For others, it’s because less money is being withheld from their paychecks.

Quote

Although most people will see their tax burden decline, the Government Accountability Office expected about four million people to pay more.

 

[+DieChecker]

So I did my taxes and I wasn't surprised. I paid less, so I got less back. Not a murderous amount less. And after doing all my usual Itemizations, the Federal Turbo Tax gave me the Standard Deduction. The itemizations did help with the State tax though. If there is a news story here, it is that the State of Oregon must have increased taxes quite a bit, because my rebate from the Feds was about 75% what I got last year, but my state rebate was about 33% what I got last year.

Final Word... As a upper middle class person, I didn't get hit hard, so I think the great majority of people are not going to get hit hard.

Edited February 22, 2019 by DieChecker

[Gromdor]

7 hours ago, DieChecker said:

So I did my taxes and I wasn't surprised. I paid less, so I got less back. Not a murderous amount less. And after doing all my usual Itemizations, the Federal Turbo Tax gave me the Standard Deduction. The itemizations did help with the State tax though. If there is a news story here, it is that the State of Oregon must have increased taxes quite a bit, because my rebate from the Feds was about 75% what I got last year, but my state rebate was about 33% what I got last year.

Final Word... As a upper middle class person, I didn't get hit hard, so I think the great majority of people are not going to get hit hard.

Hey, does Turbo Tax show your effective tax rate by any chance?  That would be the real measure on whether anyone paid more or not.  We have an accountant, so we can just ask, but the average guy might not have access to that number.  I was wondering if apps like Turbo Tax provided it for you.

[+DieChecker]

7 hours ago, Gromdor said:

Hey, does Turbo Tax show your effective tax rate by any chance?  That would be the real measure on whether anyone paid more or not.  We have an accountant, so we can just ask, but the average guy might not have access to that number.  I was wondering if apps like Turbo Tax provided it for you.

It did show it at the end. I could look it up if you like. I believe my effective tax rate was like 3% (at roughly $100k).

[Gromdor]

5 hours ago, DieChecker said:

It did show it at the end. I could look it up if you like. I believe my effective tax rate was like 3% (at roughly $100k).

Ooh, that's quite a good rate. 

I went and googled how to figure it off your forms:

BREAKING DOWN Effective Tax Rate:

An individual's effective tax rate is calculated by dividing total tax expense from line 63 of his 1040 Form by his taxable income from line 43 of that form.

So, in order to calculate the effective tax rate, use the following formulas:

                        For an individual: ETR = Total Tax Expense ÷ Taxable Income

This is the number that will tell you if you are paying more in taxes or if the result of a smaller refund is from less payroll withholding.  Just compare this number with last years returns.

Edited February 23, 2019 by Gromdor

[aztek]

Business

Democrats' anti-Trump tax cut talking point just collapsed — tax refunds are up this year

 

The IRS has released new data about tax filing season that has put weeks of overhyped media stories to rest: Compared to last year, refunds are now up 1.3 percent on average. Many politicians were quick to jump to conclusions about how tax refund data had proven that the recent tax cut law was a bad idea, but it's turning out that the Tax Cuts and Jobs Act has been on the whole a windfall for taxpayers up and down the income ladder.

This debate was always a bit silly. The size of tax refunds is not a useful metric for evaluating tax liability — realistically, the only thing they effectively measure is how accurate the federal withholding tables and individual withholding decisions were. While it’s understandable that many perceive a significant refund as a windfall, the truth is that tax refunds are an interest-free loan the taxpayer gives the federal government, not some sort of financial bonus.

https://www.yahoo.com/news/democrats-apos-anti-trump-tax-163929322.html

Edited March 4, 2019 by aztek