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Tax Returns.... HELP!

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Contributor

Tax Returns.... HELP!

Last year my income was $28K and my fed refund was $1000 (+/- 50) this year my income is $42k and my fed is $218... nothing has changed... besides jobs. I had 3 W2s last year and 3 this year. Is this just due to the bracket change.. am I missing something? I have no kids, single, no house... standard deductions... etc. Could I get some advice/input on this? Thanks!

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12 REPLIES 12
Valued Contributor

Re: Tax Returns.... HELP!

IANAL... but it sounds like they simply didn't withhold as much in the first place compared to what you actually owe. Most employers don't take the standard deduction into account, though only $200 was cutting it awfully close on their part.


TU FICO 8: 767 (5/19) — Ex FICO 8: 764 (5/19) — Opinions are my own and not the views of my employer
Message 2 of 13
Established Contributor

Re: Tax Returns.... HELP!

Same here. Here's why:

https://www.latimes.com/business/la-fi-new-tax-rules-confusion-20190125-story.html
Starting Score: EX 641 TU 631 EQ 669
Current Score: EX 714 TU 718 EQ 713 (EQ9 735)
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Message 3 of 13
Regular Contributor

Re: Tax Returns.... HELP!

Yes, at the beginning of 2018 - there were warnings to review your withholding. They correctly predicted that the new tax cuts really affected everyone's withholding. I prepared income taxes for folks, and so far - it has been just disappointment...

Message 4 of 13
Frequent Contributor

Re: Tax Returns.... HELP!


@mainemade wrote:

Last year my income was $28K and my fed refund was $1000 (+/- 50) this year my income is $42k and my fed is $218... nothing has changed... besides jobs. I had 3 W2s last year and 3 this year. Is this just due to the bracket change.. am I missing something? I have no kids, single, no house... standard deductions... etc. Could I get some advice/input on this? Thanks!


My advice is to be thrilled. I try to get wihin $200 of either owing or returned. Getting a refund just means you let the government hold your money all year without paying you any interest.


Message 5 of 13
Regular Contributor

Re: Tax Returns.... HELP!

I am so with you, fi-fico-fum! I have had a "refund" only years ago - when I was young, and I received all my withholding back.

 

No thanks, but I will take my money every payday throughout the year - and put it to much better use other than interest-free loan to the Federal government. I don't even mind owing bit, but I want as close to a zero balance every year as possible.

Message 6 of 13
Frequent Contributor

Re: Tax Returns.... HELP!


@mainemade wrote:

Last year my income was $28K and my fed refund was $1000 (+/- 50) this year my income is $42k and my fed is $218... nothing has changed... besides jobs. I had 3 W2s last year and 3 this year. Is this just due to the bracket change.. am I missing something? I have no kids, single, no house... standard deductions... etc. Could I get some advice/input on this? Thanks!


So instead of giving the government a free loan of a $1,000, you had $218 to do with what you want until April 15th. You have close to 3 months to set aside the money to pay Uncle Sam.

Message 7 of 13
Community Leader
Valued Contributor

Re: Tax Returns.... HELP!


@fi-fico-fum wrote:

@mainemade wrote:

Last year my income was $28K and my fed refund was $1000 (+/- 50) this year my income is $42k and my fed is $218... nothing has changed... besides jobs. I had 3 W2s last year and 3 this year. Is this just due to the bracket change.. am I missing something? I have no kids, single, no house... standard deductions... etc. Could I get some advice/input on this? Thanks!


My advice is to be thrilled. I try to get wihin $200 of either owing or returned. Getting a refund just means you let the government hold your money all year without paying you any interest.


This^^ Any refund you get is just you getting YOUR money back. Getting a smaller refund means the government took less of your money over the course of the year. Be happy! I usually OWE money instead of getting a refund lol You’re ahead of the game

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Message 8 of 13
Moderator Emeritus

Re: Tax Returns.... HELP!

Yeah, far better to be close to $0 or even owe the government money when we're talking cold hard personal finance.  The government nor banks give us free interest loans (well, other than our paying our tax burden on the last day possible I suppose if we owe), arguably we shouldn't be giving them similar as fractional gains are still money in our pocket rather than the Fed or whoever.

 

I knew I was going to be massively over-withheld this year only working part of the year and two jobs for that matter... and then buying the EV and taking the tax credit, my refund is going to be embarrassingly large even with claiming like tons of personal allowances on the W-4 form of both employers.

 

Every single day I'm delayed in filing my tax return is another day where more than 10k is sitting in the Fed's coffers and not in mine, which if I'd had that invested throughout the year it still would have made money even with the market correction or I could've paid off my HELOC sometime last year instead of just finishing up yesterday.  So yeah, getting a refund isn't fantastic if you're on top of your finances.

 




        
Message 9 of 13
Established Contributor

Re: Tax Returns.... HELP!

There are only 2 things (in general) that determine your tax refund - how much you owe and how much you paid. The difference is your refund. It could be that you owe a lot more this year but paid the same. It could be that you paid less this year. Or it could be that you owed more and paid more, but the increase in the former is greater than the increase in the latter. Compare your numbers from this year and last year and you'll have your answer. 

Message 10 of 13