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heilig30
New Member

I didn't have enough taxes taken out last year. I have to pay again, but year before was not bad at 800, but last year jumpt to 3500 because of tax changes?

any advice?
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4 Replies

I didn't have enough taxes taken out last year. I have to pay again, but year before was not bad at 800, but last year jumpt to 3500 because of tax changes?

No one in this user forum can see your tax return. Some people are saying “Nothing has changed from last year.”  That is not true.  There are major tax law changes that have begun with the 2018  tax year.  Personal exemptions of over $4000 per person were removed.

One thing that may be affecting your refund for 2018 is that employers began withholding less tax when the new tax law passed.  Your paychecks were more, but that means a smaller refund now. 

There are are lot of variables that affect your refund or tax due including how much you earned, how much tax you had withheld, your filing status, the number of dependents you claim, your deductions and credits, etc.  You may have lost Earned Income Credit or the Child Tax Credit— did a child turn 17?  If you received the EIC last year, remember that changes in the amount you earn have a big effect on the amount of EIC you can get. (Sometimes earning more money means less EIC)  Are you 65 or older ?  If so, your standard deduction is higher. Everyone has a higher standard deduction now so it is harder to use itemized deductions.  Or do you have a healthcare penalty?  We used to be able to suggest comparing two years of tax returns side by side to find the differences.  But with the drastic change in the 2017 and 2018 forms, that is tricky this year. Another thing to compare is the amount withheld for federal tax in box 2 of your 2018 W-2 with the amount withheld for 2017.

 

https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return

 

And of course, always check your own data entries, looking for errors such as misplaced decimals or extra zeros.

 

https://ttlc.intuit.com/questions/1901008-why-did-my-refund-go-down-compared-to-last-year-s

 

https://www.postbulletin.com/news/business/tax-preparers-warn-your-refund-may-be-smaller-than-usual/...

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

I didn't have enough taxes taken out last year. I have to pay again, but year before was not bad at 800, but last year jumpt to 3500 because of tax changes?

@heilig30 

You asked:

"any advice?"

You answered your own question, really , when you said you did not have enough tax withheld.  It is late in the year now for 2019, but try the withholding calculator:

https://www.irs.gov/individuals/tax-withholding-estimator

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Carl
Level 15

I didn't have enough taxes taken out last year. I have to pay again, but year before was not bad at 800, but last year jumpt to 3500 because of tax changes?

With the changes in tax law, the W-4 form was completely redesigned and revamped for the 2018 tax year and after. It is *IMPORTANT* that one read the instructions for completing the new W-4 form.  If one does not read and follow the instructions then they are practically guaranteed to not have enough withheld from each paycheck. Not only will this result in the taxpayer owing the IRS at tax filing time, it can also result in additional under withholding penalties being assessed because enough was not withheld from each paycheck during the tax year.

But overall I can guarantee you with 100% certainty that, unless your income in 2018 increased drastically from what it was in 2017, your tax liability was lower.

Take a look at your 2017 tax return form 1040 on line 63. That shows your 2017 tax liability.

Now look at the 2018 form 1040 line 15 and that was your 2018 tax liability. The only way the 2018 liability would be higher than your 2017 liability would be if you had a drastic and dramatic increase of your taxable income in 2018. So more than likely your tax liability for 2018 is quite a bit lower if not significantly lower than it was for 2018.

I didn't have enough taxes taken out last year. I have to pay again, but year before was not bad at 800, but last year jumpt to 3500 because of tax changes?

Well, with one major exception:

 

IF you have traditionally had a lot of (State/Local Income Taxes + Property Taxes) as an itemized  deduction in prior years, then that deduction was limited to $10,000 for 2018.   We've had a number of folks with that particular deduction at a high$$  level in 2017, and only get to use $10,000 of it in 2018.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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