Madison MoneySports - Personal Finance Thread

[Sijray21]

we didn't itemize this year and used the standard deduction ($24k). i anticipated the tax burden earlier this year and i withheld more, so luckily we're getting back a couple hundred from federal and a few hundred from state this year. i need to compare in detail the 2017 return to really see the exact impact. I didn't notice a big increase in pay during the year, but had some other issues that skewed that since i forgot to request Dependent Care FSA during my open enrollment last year and it seemed like i got paid more...

also fuck Turbo Tax. They tried to weasel us into paying their $39.99 Return Processing Service fee. i couldn't get around it when trying to eFile, so i just printed them out and sent it via snail mail... I was able to skirt the fee with last year's software, but it was different with this year's software.

Oh, I should also mention that we got the $2000 child tax credit because phase out moved from joint income >$110k to $400k.

Same - that was nice.

[Jewels]

So I was very surprised in the difference in my taxes from 2017 to 2018. I attributed it to the fact that Rex and I trade off claiming the kiddo, and 2017 was my year, so 2018 he gets to claim her. While I managed to see very little difference in my paychecks during the year, I definitely felt it at tax time I guess. I suppose I was lucky I didn't have to pay in. I'll have to go back and look to see if my accountant itemized last year, because I know she didn't this year. I suppose I got off close to lucky since I didn't have to pay, but not going to lie, I was hoping for a bigger return only simply to have enough money to get some house stuff taken care of. But nevertheless, I will figure it all out, could have been worse.

[Apoc]

Also, my Turbo Tax crashed 14 times while doing my taxes. The first time, I was 80% through and, apparently, it doesn't auto-save with each step completed. I've used it for like 10 years, but I'm pretty sure I'm done with it here on out.

[Kaan]

I gave up on Turbo Tax back when I was getting 10-99s from NASA. The accountant made their money back 3 fold vs. turbo tax back in the 10-99 days... and I haven't looked back.

[JPolen01]

Most paychecks went up after they took effect. Did yours? That might be where some of that offset is coming from.

Nope. No bump on my paycheck. I think my base salary is slightly below the threshold of seeing any increases from the trump bump.I wish it was a bit simpler to figure out exactly what changed in the law and how it affected me. I am having a hard time understanding why we owe this year. Anyone got a good primer on the changes?

Edit:
Could the changes to the SALT deduction really have screwed me that bad? Seems to be the only major thing I can look to that might affect us.

[davej]

Also, my Turbo Tax crashed 14 times while doing my taxes. The first time, I was 80% through and, apparently, it doesn't auto-save with each step completed. I've used it for like 10 years, but I'm pretty sure I'm done with it here on out.

Turbo what? I thought you went to college so somethingsomething

I'm with Kaan, having an accountant is very much worth it. 
Having the business was almost a must have, and she handles all the payroll taxes and other bs from every extortionist with their hand in your pocket.

[Apoc]

Also, my Turbo Tax crashed 14 times while doing my taxes. The first time, I was 80% through and, apparently, it doesn't auto-save with each step completed. I've used it for like 10 years, but I'm pretty sure I'm done with it here on out.

Turbo what? I thought you went to college so somethingsomething

I'm with Kaan, having an accountant is very much worth it. 
Having the business was almost a must have, and she handles all the payroll taxes and other bs from every extortionist with their hand in your pocket.

File this one under not paying someone if you enjoy doing it. I love doing my taxes and even took Federal Taxes as an elective in college.

That said, our taxes are very, very simple. I would have been done in 30 min had I not had TT problems. If we did something like move overseas, I'd probably have someone else do it.

[WRXtranceformed]

My taxes are always pretty complicated so I've used an accountant for years. I'll find out next Monday whether I'll owe this year or not. I definitely saw a monthly bump in paycheck with all things equal after the bill went into effect, but I then dialed back my exemptions in an attempt to prepare for a possible bill this year. We will see what happens, but either way I'll know if I did my calculations right or not.

I think for the vast majority of people in the US who do not itemize, the new laws tossed money back into their paychecks each month (which is a good thing). The challenge is making sure you didn't get so much that you have to cut a check at the end of the year

[.RJ]

I had to withhold more in taxes once I did the estimated taxes for the year on the IRS website - I'm sure that no one did that. Fucking morons. I think I was holding back an extra $150-200 per paycheck. I hope every one of those trump voting motherfuckers got their tax bill turned upside down but the way the code was written its a big fuck you to anyone who lives in a high SALT state, i.e. "coastal elite libtards".

That said, itemizing still worked out better for us but only because we sold and bought a house and a few thousand in charitable donations - we hit the SALT deduction no problem. The biggest thing that tilted the tax bill in our favor this year was that we took big tax hits (20%) on the withdrawal of investment money, but up to $10k per person on the tax is credited back if you use that money to buy a house. For next year I'm going to maintain my withholdings as they are and I think we'll be about even.

I'm also with chris on doing my own taxes. I use turbotax and it takes me an hour or two to do everything, all the docs are easily available online and most import directly into turbotax. My wife used to take her shit to H&R block and pay $600 for this crap. Even with business expenses, I just deposit the money paid to my LLC into my personal account and claim it on schedule C. There might be a more advantageous way of doing it but we're not talking about very much money here, certainly not enough to offset the cost of a CPA.

[Kaan]

$600 at H&R? lawd have mercy... we pay $200 annually (up from $120)

[*insertusernamehere*]

Holy shit I have a lot to learn. I just send all my shit to my aunt who is an accountant. I should learn though.

[D_Eclipse9916]

It's easy, I have been doing my own taxes since I was in college.

And then you get your significant other. I only changed my withholding, not sure what my wife did when she went part-time but just looked at her W2. SHIT. We will probably be owing a significant amount.

[Senor_Taylor]

H&R block takes me 30 minutes and is free every time for me. Maybe I'm missing something but it's not that hard when you're young.

Sent from my Pixel 3 XL using Tapatalk

[JPolen01]

H&R block takes me 30 minutes and is free every time for me. Maybe I'm missing something but it's not that hard when you're young.

Sent from my Pixel 3 XL using Tapatalk

No it's not hard when you're old either if you work a normal W2 job and have no other income or little investment income to worry about. When you become self employed or own a business it gets complicated and accountants do a way better job at reducing your tax burden.

If you only have W2s to file and you pay an accountant you're wasting money.

[Apoc]

I think they were responding to dude who said he had a lot to learn. The best time to start is when you're young, 'cause then you get in the habit of thinking how taxes could impact you. It's also super easy for most college kids, as they're generally filing a 1040EZ. When you get older, it's just a matter of whether you want to know tax code or not and how complicated your finances are. I personally like it because it helps me understand how many life decisions impact and are impacted by the tax code. That's not to mention things like FSA/HSA/401k. But also, we didn't even have capital gains to claim this year, so it was total easy button.

[Ryan T]

I married an accountant instead. Easy button.

[Steve85]

We are coming out OK, owe a little Fed, get some back on state. But it is only because I did the IRS calculator twice last year. When I saw my first paycheck, I called BS on the reduced taxes. We had a couple times where weren't good about updating our exemptions regarding the younger daughter and her living with us, then not, then living with us, etc. and got burned at tax time so I've tried to be better about using that tool. I had to add a fair amount of extra withholding at the beginning, very close to the reduced tax amount in the paycheck..go figure. I checked again in July and we were pretty much on target.

The tax brackets dropped, but we needed to be ready to give up about 17K in exemptions (personal, children, and SALT). I ran this years income and deductions against previous year tax brackets and such to compare. For the same income and deductions, the taxable amount is much higher this year, but, it was taxed at a lower enough rate that it was a whopping $1500 difference. In other words, if no tax changes were made, we would have owed $1500 more (total, not "on tax day") this year than we paid this year.

We would have owed a few thousand of our total liability April 15 if we had not adjusted at the beginning of the year.

Also been using Turbo Tax for several years after H&R screwed up two years in a row. They covered the difference, but just lost confidence.

[plaugs_golf]

I haven't checked to see if anyone has mentioned it before at all, but has anyone used Robinhood or Acorns? I have both and have thrown about $20 into each just to check it out.

[Apoc]

Experience investing one's HSA? Anyone regret it because you ended up with less than you contributed?

[.RJ]

Investing, no - using it in conjunction with a HDHP, yes. With the latter its fairly seamless and easy, but there has never been enough set aside to leave anything leftover. I'd be curious to see the math there for investing there pre-tax vs post-tax in an index fund.