2018 Tax Horror Stories

51 Replies

Originally posted by @Greg H. :
 

 Joe Gore lives on !!! Still waiting for him to complete his investigation of me

I  miss Joe. He was always good for some comic relief!

Originally posted by @Ericka G. :

@Kevin Gray I’m surprised more people aren’t talking about this...we’re definitely looking at our highest tax bill ever this year and I’ve noticed others grumbling about it too. For us, I think the change in the withholdings rules made it so that our employers somehow under-collected tax...our income also jumped up a lot due to unexpected bonuses so it was a bad combo for this new tax code :(

There is a major misconception here. Your total tax is how much your tax bill is for the year. Whether or not you receive money back is the result of how much was paid during the year.  How much you owe is not how much your taxes went up or down. 

Did your tax bill really go up? The only way to determine this is look at your taxes for 2017 and 2018. Compare the total tax owed for both years. That may still not paint a full picture. You also need to look at tax owed as a percentage of income to determine your effective percentage for both years.

In 2018, line 15 is "Total tax".

In 2017, line 63 is "Total tax".

For example, my total income increased from 2017 to 2018, but my total tax decreased by $4000. The amount I owed this year decreased by $500, but that is really unimportant. Think of taxes like any bill. How much you owe is simply the original total minus payments already made.

Also keep in mind as an investor, you are not paying taxes throughout the year on your rental income, unless you are making quarterly payments. As you grow your rental business, it will get harder to avoid making quarterly payments, unless you have very large W2 income withholding. 

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