Very Large increase in 2018 Taxes

[Seanay]

That really sucks. We only went up about $10k from 2017 and we have same problem this year, the deductions is where they got us, used to take about $33k in deductions itemized but now it's capped at 24k I think so about a 7k turnaround

[stephronl]

This is all do to Republicans tax bill that took affect . There have been many articles saying tax payers would see smaller if not owe on there taxes i believe its has to do with tax brackets withholding.

[zuiwall]

If you had 33k in itemized deductions previously you can still itemize that amount now. If you're saying the your previous itemized PLUS exemptions were 33k, then you would see a reduction this year.

[NCperson]

Ability to deduct the $33 k -same as last year - is not necessarily true if the state and local taxes (SALT) deductions exceeded $10,000 last year ; also if some of the $33k was misc. deductions, they are all eliminated as well in 2018

[Seanay]

Given the same scenario this year as compared to last year ezcept our combined income went up about$10k, we are still under the 180k bracket. When I compared last year returns to this year's, the difference is the itemized deductions, nothing has changed except the tax rules. I owe 4k this year and last year got 2409 refund. How do I take itemized deductions? TurboTax does not recognize my student tuition AOC deductions at all as it did last year and there's 2 boys in college with no grants or scholarships

[NCperson]

please review the link below

https://turbotax.intuit.com/tax-tips/college-and-education/take-advantage-of-two-education-tax-credi...

there is an income phase out which is why you may not have captured either one of the two credits noted in the link.  (you didn't note whether you are single or married as the phaseouts are different for each case)

did TT capture the $500 Other Dependents Credit (child must be under 24 if full time student but over the age of 16); there are other requirements but just answer the questions in TT to determine eligibility.

Also, for itemization, just answer the questions in TT;  if filing married joint, the standard deduction is $24,000 ($18k if head of household, $12k if single), so no sense capturing the itemized deductions if your totals are less than that (and state and local taxes are limited to $10k).  

lastly, as noted in other parts of this thread, historically about 75% of tax filers received a refund.  Separate from the tax law change, the withholding files from the IRS to employers were adjusted so that the expectation was that far less than 75% will receive a refund (and of course that means a higher percent will owe).  From the comments in this thread, that appears to be playing out - you are not alone.

Look at the bottom of the '5 year history' in TT (it's in the Desktop version, not sure about online) and it will show the percentage of tax liability against gross income, and it validates whether there is a  benefit or not from the tax law changes.... the separate conversation is whether your employer withheld enough or not resulting in no refund on April 15 - it's two separate conversations.

[Seanay]

NCperson is absolutely correct, we are basically capped out and I am in CA

[Seanay]

I am married filing jointly and two boys between 18-20 years age. Our income combined is just under 160k before adjustment. Last year it was similar numbers. We have mortgage interest of 12k, property tax of 5k, and both boys are in school and we support them and pay their tuition partly. Last year I was allowed to itemized as was the case every year previously and usually end up with about 32-33k in deductions. Usually end up with 1-3k of refunds but this year owe 4k plus...only thing I can readily tell is that when I claim AOC for the boys, it does not make a difference like last year not does my property taxes it seems.
I am not 100% sure what the issue is but we should have taken 0 on withholding but didn't because we were not paying attention and left our withholding on 2 for wife's w-4. If I got nothing back this year even that would be understandable but in my and many others cases, we owe 3-4k so that is a 5-7 k swing which I don't think is reasonable, maybe I'm missing something but from the responses so far it looks like others with similar numbers are in the same situation so I'm going to have to get a payment plan setup with IRS I guess

[LEE2CEE]

WITH THE NEW 2018 TAX LAWS.  I AM LOOSING $400.00.  I MAKE LESS THE $30,000. NOW THEY GOVERNMENT IS CHEATING ME OUT OF MORE MONEY TO PAY FOR IMMIGRANT AND THEIR POCKETS

[Seanay]

@NCperson; our Magi is below 160k and still it will not let us take the AOC. Is this because I'm in CA with the SALT cap?? Also TT will not let me take any other dependents credit for my son's...

[anhenry546]

Oh lordy where to start, 1st- you do realize Trump DOES NOT want our hard earned money to be spend supporting illegal immigrants right? 2nd- if you would have adjusted your withholdings like you were supposed to this wouldn't even be anice issue. So many people failed to do this and then want to blame everyone but themselves! The new tax cuts help the lower to middle class, if you aren't in that group it probably won't save you money, it's better for it to help 80% of the population rather than help just the 20%. The child credit was doubled, the phase out was doubled, the standard deductions were doubled, he even created twice as many exemptions for the health care penalty so most people wouldn't have to pay it. If you are in the lower to middle class and these things didn't help you than you have to be in the upper class or you simply didn't adjusted your withholdings (or you are just doing something wrong) so don't blame everyone else but yourself.

[anhenry546]

Once again, because someone did not adjust their withholdings they owe money. The irs always recommends to adjust ESPECIALLY when their in a change in tax laws. People didn't do this and then get mad that they owe but in reality the only person to be mad at is yourself. At least this person was aware that it was due to them not adjusting.

[stephronl]

Clearly you dont stay informed it's already been said Republican tax cuts are not doing what they said they would yes I do agree withholding needed to be looked at and adjusted for some house holds . As for your immigration comment you do know are drug issue is at legal points of entry not the border that a fact ...further more no wall will keep them from tunneling , going by boat this were border control agents are needed also land owners at the border have said its peaceful and they would fight Trump administration in court , might I add that only Trump base wants this wall or steel fence which from your rant defending his tax cuts that have helped the rich 69 percent of Americans do not want this wall. So please stop insulting people in your attempt to defend tax cut that the Republicans clearly have run from themselves.   

[anhenry546]

Here is an unbiased article for all of you who don't understand the tax cuts and their purpose. If you would have adjusted withholdings you wouldn't be hit with a tax bill. I'm sure some upper class may not do as well this year but let's face it, the lower classespecially are who needs help, not the upper class. But even then, they still tried to make it beneficial to the upper class as well. Learn some facts before commenting on matters you don't quite understand.

https://www.investors.com/politics/editorials/gop-tax-cuts-middle-class/

[anhenry546]

@LEE2CEE If you would have adjusted your withholdings you wouldn't have been hit with anything, unless it's a penalty for something like health care and then you'd have good ol Obama to thank for that.